Inventory—Demonstrators – Ford Online Accounting Manual

Assets

INVENTORY—DEMONSTRATORS	ASSET ACCOUNT
	1340

ACCOUNT EXPLANATION
TRANSACTIONS
COMMENTS

ACCOUNT EXPLANATION

New vehicles in demonstrator service, valued at factory invoice cost, less holdback, or at estimated wholesale value, whichever is lower. Includes labor and material charges for dealer-installed options and accessories.

TRANSACTIONS

			Jrnl.	Dr.	Cr.

New car placed in demonstrator service			G
	Inventory—Demonstrators			1340
		Inventory—New Cars			1300

Demonstrators transferred to new car inventory for sale			G
	Inventory—New Cars			1300
		Inventory—Demonstrators			1340

Claim for model year-end carryover rebate			G
	Ford Receivable—Carryover Allowance			1175
		Inventory—Demonstrators			1340

COMMENTS

Sales of demonstrators should be classified as new vehicle retail sales.
The description and cost of demonstrators purchased should be entered on a subsidiary vehicle inventory record, and the department responsible for their costs should be noted on the record.
At month end, demonstrators should be physically inventoried and their total cost reconciled with the balance in this account.
This account should not include courtesy cars, service vehicles, leased vehicles, or driver training vehicles.
If at month end, the amount at which a demonstrator is carried in inventory exceeds its current estimated wholesale value, the excess should be credited to this account and charged to Account 7150, Demonstrator Expense—New; Account 7350, Demonstrator Expense—Used; Account 7680, Equipment & Vehicle Maintenance—Parts; Account 7780, Equipment & Vehicle Maintenance—Service; or Account 8780, Equipment & Vehicle Maintenance—General, as appropriate.