October 30, 2016 admin

Used Cars (Non Certified)—Retail Lease

Sales and Cost of Sales

USED CARS (NON CERTIFIED)—RETAIL LEASE ACCOUNT
SALES  3715 3720
COST OF SALES  4715 4720
ACCOUNT EXPLANATION
Sales: Value of lease contracts, less any discounts or overallowances, of used cars (Non Certified) leased to retail customer, usually under Red Carpet Lease Programs.

Cost of Sales: Inventory value of units leased, excluding reconditioning costs of used cars sold to lease customers.

NOTE: Separate numbers have been assigned for FoMoCo retail leases:

FoMoCo Used—Retail (Non Certified) lease sales/cost of sales 3715/4715
Non FoMoCo Used—Retail lease sales/cost of sales 3720/4720

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers
TRANSACTIONS
Jrnl. Dr. Cr.
Sale of vehicle and assignment of Red Carpet Lease Plan to F.M.C.C. UV
Accounts Receivable—F.M.C.C. Lease Plan 1135
Accounts Receivable—F.M.C.C. Deferred Gross 1836
Sales—Used Cars—Retail Lease (Non Certified) 3715, 3720
Costing of sale of vehicle sold to F.M.C.C. UV
Cost of Sales—Retail Leases—Used Car Retail Lease 4715, 4720
Cost of Sales—Reconditioning—Used Car Retail Lease (Non Certified) 4716
Inventory—Used Cars (Non Certified) 1350
COMMENTS
  • The cost of each vehicle and reconditioning costs should be obtained from the subsidiary vehicle inventory record. Sales data should be entered on the vehicle inventory record.
  • When used cars are leased, the inventory value, excluding reconditioning costs, of the units should be charged to Account 4715 Ford Motor Company Used Cars (Non Certified) (4720 non FoMoCo used cars), Cost of Sales—Used Cars—Retail Lease (Non Certified), and reconditioning costs should be charged to Account 4716, Cost of Sales—Used Cars—Reconditioning Retail (Non Certified).
  • Dealers who need to maintain records of gross sales and/or overallowances on used vehicle sales may use one of two methods:
    1. Record gross sales and/or overallowances as memo items in the Vehicle Sales Journal, without regard to vehicle line, or:
    2. Establish a separate account, using Account 3701, Used Cars—Retail (Non Certified)—Overallowances, to which overallowances should be debited. Gross sales amounts should be credited to Account 3715.