Inventory—Used Certified SUV/Trucks (Franchise Only)

• ACCOUNT EXPLANATION
• TRANSACTIONS
• COMMENTS

ACCOUNT EXPLANATION

TRANSACTIONS

COMMENTS

• Used SUV/Trucks should be placed in inventory at estimated wholesale value, less estimated reconditioning required to make the vehicle saleable at the estimated wholesale value. When repossessed units are placed in inventory, the excess of purchase price over estimated wholesale value should be charged to Account 2600, Estimated Liability for Repossession Purchase Loss. If account 2600 is not used, the excess should be charged to Account 6070, Repossession Purchase Loss—New, or Account 6170, Repossession Purchase Loss—Used, depending on whether the sale that led to the repossession was a new vehicle sale or a used vehicle sale.
• Subsidiary records should support this account. At month end, used SUV/Trucks should be physically inventoried and their total value reconciled with the balance in this account. An aging schedule of used SUV/Trucks on hand should be prepared for management review.
• If at month end, the amount at which a unit is carried in inventory exceeds its current estimated wholesale value, the excess should be credited to this account and charged to Account 4752, Used SUV/Trucks—Inventory Adjustments.
• Auction fees incurred on purchase of used SUV/Trucks should be charged to this account.
• An inventory numbering system, providing cross-referencing to the new vehicle source where applicable, should be used. See Office Management for details.
• Units sold as junkers should be recorded as wholesale sales.
• For financial statement purposes Account 1836, Accounts Receivable F.M.C.C.—Deferred Gross, should be combined with Account 1830, Other Assets.