October 30, 2016 admin

Demonstrator Expense—New

Expenses

DEMONSTRATOR EXPENSE—NEW EXPENSE ACCOUNT
7150

ACCOUNT EXPLANATION
Expenses of financing, maintaining and repairing demonstrators in service for the benefit of the new vehicle department. Includes floor plan interest, insurance, licence fees, gas, lubrication, washing, repairs and related expenses absorbed by the dealership on demonstrators owned by or assigned to new vehicle department employees and write-downs of such demonstrators to estimated wholesale value.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Wheel alignment of demonstrator in service
 • Record internal sale:		 I
    Demonstrator Expense—New 7150
      Sales—Labor—Internal (at internal rate) 5730
   • Record cost of internal sale:
    Cost of Sales—Labor—Internal—Service 6730
      Inventory—Labor in Process 1440
             
  Monthly write-down of new vehicle department demonstrator to estimated wholesale value SE
    Demonstrator Expense—New 7150
      Inventory—Demonstrators 1340
COMMENTS
  • Amounts charged to new vehicle department employees for the use of demonstrators should be credited to this account.
  • If the new car and new truck activities are organized as separate departments, charges to this account should be distributed directly to the departments generating the expense. See Departmentalization for further information.