Ford Receivable—Price Protection – Ford Online Accounting Manual

Assets

FORD RECEIVABLE—PRICE PROTECTION	ASSET ACCOUNT
	1220

ACCOUNT EXPLANATION
TRANSACTIONS
COMMENTS

ACCOUNT EXPLANATION

Price Protection is intended to ensure firm prices to Ford dealers and their customers in those where prices may be increased by the Company between the time a dealer bids and orders a vehicle and the time a vehicle is released for shipment.

TRANSACTIONS

			Jrnl.	Dr.	Cr.

Price Protection due from Ford Motor Company			VS
	Ford Receivable—Price Protection			1220
		Applicable Cost of Sale Accounts			4400-etc.

Check received in payment of Price Protection			CR
	Cash in Bank—General			1001
		Ford Receivable—Price Protection			1220

COMMENTS

Payments received prior to delivery of the vehicle(s) are to be credited to Account 1310, Inventory—New Trucks, as a reduction of the inventory value.
If vehicle(s) are delivered prior to receipt of payment, the expected price protection amount is to be debited to Account 1220, Ford Receivable—Price Protection, and the offsetting credit to the applicable Cost of Sales account.
Differences between receivables as established and amounts paid are to be reconciled and adjusted where appropriate.
Amounts outstanding 90 days or more must be reserved in Account 1291, Allowance for Doubtful Ford Receivables.