651B Reconditioning – Other Used Trucks
Cost of Sales
Used Vehicle Department
Cost of Sales Synopsis
Account 651B, Reconditioning – Other Used Trucks is established to record the cost of Reconditioning of non-GM Certified Used Trucks.
Debits |
Credits |
|
|
Example 1
Record a Used Truck - Other sale in the amount of $22,283 with a finance contract reserve of $865, sales tax of $1,114 and Document Handling Fees of $180. The inventory value is $21,083 of which $1,083 is due to Reconditioning.
Journal: Used Car Sales
Entry: |
|
Debit |
Credit |
Account 205 |
Contracts in Transit |
$23,577 |
|
Account 262 |
Due from Finance Companies |
$865 |
|
Account 650B |
Cost of Sales – Used Trucks Retail – Other |
$20,000 |
|
Account 651B |
Reconditioning – Cert. Used Trucks |
$1,083 |
|
Account 450B |
Sales – Used Trucks Retail – Other |
|
$22,283 |
Account 241 |
Inventory – Used Trucks |
|
$21,083 |
Account 324A |
Sales Taxes Payable – Excise Taxes |
|
$1,114 |
Account 808 |
Finance Income – Used |
|
$865 |
Account 910 |
Document Handling Fees |
|
$180 |
Comments
The Used Vehicle manager is responsible for appraising Used Trucks at the time of acquisition. The appraisal should include an estimate of necessary Reconditioning work in order to prepare the vehicle for sale. The Used Vehicle manager should prepare the Internal Repair order to have the Reconditioning performed. The cost of Reconditioning should be charged to the vehicle by debiting Account 241, Used Trucks (Inventory). When the vehicle is sold at retail to an end user, the Reconditioning cost is debited to this account.