October 30, 2016 admin

Inventory—Sublet Repairs

Assets

INVENTORY—SUBLET REPAIRS ASSET ACCOUNT
1441

ACCOUNT EXPLANATION
Cost of vehicle repairs performed by outside sources and unsold at month end.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Customer’s radiator repaired by outside vendor P
    Inventory—Sublet Repairs 1441
      Accounts Payable—Trade 2100
             
  Sublet customer repair costed out at time of sale PS
    Cost of Sales—Sublet Repairs—Service 6750
    Cost of Sales—Sublet Repairs—Body Shop 6800
      Inventory—Sublet Repairs 1441
             
  Cylinder rebore on used car reconditioning order P
    Inventory—Sublet Repairs 1441
      Accounts Payable—Trade 2100
           
  Internal repair order covering sublet cylinder rebore job I  
    Inventory—Used Cars   1350
    Cost of Sales—Sublet Repairs—Body Shop (at cost)   6800
      Sales—Sublet Repairs—Service (at cost)     5750
      Inventory—Sublet Repairs     1441
COMMENTS
  • At month end, an inventory of unsold sublet repairs should be taken and reconciled with the balance in this account.
  • For control purposes, a purchase order should be issued for each sublet transaction and the purchase order, vendor invoice and the repair order should be appropriately cross-referenced.