October 30, 2016 admin

Inventory—Parts—Non FoMoCo

Assets

INVENTORY—PARTS—NON FoMoCo ASSET ACCOUNT
1410/1406

ACCOUNT EXPLANATION
Parts, accessories, and tires on hand purchased from sources other than Ford Motor Company valued at the lower of cost or estimated market value, excluding freight.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Parts purchased from sources other than Ford Motor Company on open account P
    Inventory—Parts—Non FoMoCo 1410
    Inventory—Parts—Quick Lane 1406
      Accounts Payable—Trade 2100
             
  Inventory value of parts sold to a wholesale customer PS
    Cost of Sales—Parts—Wholesale 6400
      Inventory—Parts—Non FoMoCo 1410
      Inventory—Parts—Quick Lane     1406
             
  Costing of internal sale of parts on a repair order under used car guarantee I
    Cost of Sales—Parts—Internal—Service 6470
    Cost of Sales—Parts—Internal—Service–Quick Lane/Tires 6475,6476
    Cost of Sales—Parts—Internal—Body Shop 6530
      Inventory—Parts—Non FoMoCo 1410
      Inventory—Parts—Quick Lane   1406
           
  Reduction of parts inventory account to physical inventory value G  
    Allowance for Parts Inventory Adjustments—Other   1432
      Inventory—Parts—Non FoMoCo     1410
      Inventory—Parts—Quick Lane     1406
           
  Costing of parts used to repair units damaged in transit PS  
    Cost of Sales—Parts—Repair Shop   6430
    Cost of Sales—Parts—Repair Shop–Quick Lane/Tires   6435/6436  
    Cost of Sales—Parts—Body Shop   6500, 6510  
      Inventory—Parts—Non FoMoCo     1410
      Inventory—Parts—Quick Lane     1406
             
  Unit Down orders and critical orders P    
    Inventory—Parts—Non FoMoCo   1410  
    Inventory—Parts—Quick Lane   1406  
    Parts Return and Handling Charges   6580  
      Accounts Payable—Trade     2100
             
  Accessories installed in a new car I    
    Inventory—New Cars   1300  
      Inventory—Parts—Non FoMoCo     1410
      Inventory—Parts—Quick Lane     1406
      Labor Sales—Internal—Service     5730
COMMENTS
  • It is recommended that parts sales be costed on an item-by item basis at the time of sale, since this method produces the most accurate cost of sales data and provides the best control of inventory. If parts sales are costed on the basis of estimated categories, percentages used should be verified by test checks of actual item costs over a 30-60 day period every six months. Office Management contains additional information on costing methods.
  • Accounts 1411-1419 may be used to control various types of parts, such as maintenance parts, body parts, accessories, etc.
  • Freight on parts purchased should be charged to Account 7671, Freight—Parts.
  • At least annually, a physical inventory should be taken and the balance in this account adjusted to the physical inventory value through Account 1430, Allowance for Parts Inventory Adjustments—Non FoMoCo.