October 30, 2016 admin

Ford Receivable—C.P.A.

Assets

FORD RECEIVABLE—C.P.A. ASSET ACCOUNT
1210

ACCOUNT EXPLANATION
Competitive Price Assistance (C.P.A.) granted to Ford dealerships to meet competitive need when bidding Ford medium and heavy trucks against similar vehicles of other manufacturers.
TRANSACTIONS
  Jrnl. Dr. Cr.
  C.P.A. due Ford Motor Company on sale of a vehicle VS
    Ford Receivable—C.P.A. 1210
      Applicable Cost of Sales Accounts 4400-etc.
             
  Check Received in payment of C.P.A. CR
    Cash in Bank—General 1001
      Ford Receivable—C.P.A. 1210
COMMENTS
  • On vehicle ordered with C.P.A. deducted from the invoice, no accounting application is required other than to record the sale of the involved vehicles in the normal manner.
  • On vehicles invoiced at gross amount, a receivable is to be established for applicable C.P.A. concurrent with recording the sale of the vehicle. The debit is to be made to Account 1210, Ford Receivable—C.P.A., with the offsetting credit to the applicable vehicle 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.