446B Used Cars Retail - Other

Sales

Used Vehicle Department

Sales Synopsis

This account is established to record the Retail sales of Other Used Cars, which are not eligible for the GM Certified Used Car program.

Debits

Credits

 

  1. The selling price of all Other Used Cars sold to end users 

 

646B Used Cars Retail - Other

Cost of Sales

Used Vehicle Department

Cost of Sales Synopsis

This account is established to record the inventory value (less Reconditioning) of Other Used Cars sold in Account 446B, Used Cars Retail - Other, above.

Debits

Credits

  1. The inventory value, LESS Reconditioning, of Other Used Cars sold to Retail customers

 

 

Example 1

Record an Other Used Car sale in the amount of $17,076 paid partly with a $14,055 finance contract and $4,000 from the trade-in. The finance contract reserve is $853, sales tax is $854 and Document Handling Fees are $125.  The inventory value of the used vehicle sold is $15,876 of which $876 is due to Reconditioning.

Journal: Used Car Sales

Entry:

 

Debit

Credit

Account 205

Contracts in Transit

$14,055

 

Account 262

Due from Finance Companies

$853

 

Account 646B

Cost of Sales – Used Cars Retail – Other

$15,876

 

Account 240

Inventory – Used Cars

$4,000

 

Account 446B

Sales – Used Cars Retail – Other

 

$17,076

Account 240

Inventory – Used Cars

 

$15,876

Account 324A

Sales Taxes Payable – Excise Taxes

 

$854

Account 808

Finance Income – Used

 

$853

Account 910

Document Handling Fees

 

$125

Comments

Used Cars which do not qualify to be marketed as GM Certified are to be recorded in these Sales and Cost of Sales accounts.  As Used Cars are acquired, they should be placed in inventory by debiting Account 240, Used Cars (Inventory) at the lower of either cost or market value.  The Used Car manager should immediately prepare an Internal Repair Order to have the necessary Reconditioning performed.  The cost of the Reconditioning work is also debited to Account 240, Used Cars (Inventory).  When Used Cars are sold at retail to end users, the sale and cost of sale, less reconditioning, respectively are posted to Account 446B, Used Cars Retail - Other (Sales) and Account 646B, Used Cars Retail – Other (Cost of Sales).