October 30, 2016 admin

Demonstrator Expense—Used

Expenses

DEMONSTRATOR EXPENSE—USED EXPENSE ACCOUNT
7350

ACCOUNT EXPLANATION
Expenses of financing, maintaining and repairing demonstrators in service for the benefit of the used vehicle department; including floor plan interest, insurance, license fees, gas, lubrication, washing, repairs, expenses absorbed by the dealership on demonstrators owned by or assigned to used vehicle department employees; and write-downs of demonstrators to estimated wholesale value.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Gas dispensed at dealership for demonstration loan-out of used car to prospect I
   • Record internal sale:      
    Demonstrator Expense—Used 7350
      Sales—Gas, Oil, & Grease (at internal rate) 5780
             
   • Record cost of internal sale:
    Cost of Sales—Gas, Oil, & Grease 6780
      Inventory—Gas, Oil, & Grease 1443
             
  Monthly write-down of used vehicle department demonstrator to estimated wholesale value SE
    Demonstrator Expense—Used 7350
      Inventory—Demonstrators 1340
COMMENTS
  • Amounts charged to used vehicle department employees for the use of demonstrators should be credited to this account.
  • Reconditioning work and normal maintenance incurred on used vehicles in inventory should be charged to the accounts specifically provided.
  • 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.