October 30, 2016 admin

Free Service/Maintenance & Policy—Used

Expenses

FREE SERVICE/MAINTENANCE & POLICY—USED EXPENSE ACCOUNT
7230

ACCOUNT EXPLANATION
Expense of maintaining used vehicles prior to delivery and repairing used vehicles previously sold to customers, at internal rates.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Replacement of part in used car under warranty
 • Record internal sale:		 I
    Free Service/Maintenance & Policy—Used 7230
      Sales—Parts—Internal—Service (at internal rate) 5470
      Sales—Labor—Internal—Service (at internal rate) 5730
             
   • Record cost of internal sale:
    Cost of Sales—Parts—Internal—Service 6470
    Cost of Sales—Labor—Internal—Service 6730
      Inventory—Parts—Other 1410
      Inventory—Labor in Process     1440
COMMENTS
  • Labor and material used in placing used vehicles in saleable condition are considered reconditioning and should be added to the inventory cost of the individual used vehicle.
  • If used vehicle activities are organized into two or more separate departments, charges to this account should be distributed directly to the departments generating the expense. See Departmentalization for further information.