October 30, 2016 admin

Inventory—New Trucks—Other Franchise

Assets

INVENTORY—NEW TRUCKS—OTHER FRANCHISE ASSET ACCOUNT
1315

ACCOUNT EXPLANATION
Cost of New Other Franchise Trucks, truck bodies and equipment on hand, including labor and material charges for dealer-installed options and accessories. Cost excluded holdback on vehicles purchased from Other Manufacture Companies.

New vehicles purchased from the company should be recorded in inventory at cost, excluding the vehicle holdback.
TRANSACTIONS
  Jrnl. Dr. Cr.
  New Truck Other Franchise purchased on wholesale floor plan VP
    Inventory—New Other Franchise Trucks 1315
    Ford Receivable—Vehicle Holdback     1160  
    Ford Receivable�Other Franchise Programs 1200
      Notes Payable—New Vehicles & Demonstrators 2000
             
   Check received for New Truck Other Franchise transferred to another dealer at a gain CR
    Cash in Bank—General 1001
      Inventory—New Trucks Other Franchise 1315
      Cost of Sales—Dealer Transfers (amount of gain) 4640
      (Receiving dealer should charge Account 1315, Inventory—New Trucks Other Franchise, with the purchase cost of the vehicle)    
             
  Costing of new truck sold at retail NV  
    Cost of Sales—New Light Trucks—Retail & Fleet   4400-
etc.
      Inventory—New Other Franchise Trucks     1315
           
  Dump body installed on new truck by outside supplier P  
    Inventory—New Trucks Other Franchise   1315
      Accounts Payable—Trade     2100
COMMENTS
  • Subsidiary records should support this account. At month end, trucks should be physically inventoried and their total cost reconciled with the balance in this account.
  • Holdbacks should be deducted from the factory invoice total and charged to Account 1160, Ford Receivable—Vehicle Holdback.
  • An inventory numbering system that will identify units by truck series should be adopted. See Office Management for details.
  • If necessary, Accounts 1320-1328 may be used to control the various types of inventory, such as new trucks, truck bodies and equipment etc., that are grouped in this account.