October 30, 2016 admin

Parts—Wholesale

Sales and Cost of Sales

PARTS—WHOLESALE ACCOUNT
SALES  5400/5401/5402
COST OF SALES  6400/6401/6402

ACCOUNT EXPLANATION

Sales: Selling price of parts sold to customers generally recognized as wholesale, such as fleet owners, service stations, and other automobile dealers.

Cost of Sales: Inventory value of above parts sold.

NOTE: Dealers with competitive franchises (Non FoMoCo) separate parts and report FoMoCo (franchise) parts in Account 5400/6400 and QL/FL/QCSC Account 5402/6402 Non FoMoCo (other franchises) in Account 5401/6401.

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers
TRANSACTIONS
  Jrnl. Dr. Cr.
  Parts sold to outside body shop for cash PS
    Cash Sales—Clearing 1010
      Sales—Parts—Wholesale Franchise/Other 5400, 5401
      Sales—Parts—Wholesale—QL/FL/QCSC     5402
             
  Parts sold to fleet owner on open account PS
    Accounts Receivable—Parts 1120
      Sales—Parts—Wholesale Franchise/Other 5400, 5401
      Sales—Parts—Wholesale—QL/FL/QCSC 5402
             
  Parts costed out at time of sale PS
    Cost of Sales—Parts—Wholesale Franchise/Other 6400, 6401
      Inventory—Parts—Ford/Other 1400, 1410
    Cost of Sales—Parts—Wholesale 6402  
      Inventory—Parts—QL/FL/QCSC 1406
COMMENTS
  • It is recommended that parts sales be costed on an item-by-item basis at the time of sale, since this method produces the most accurate cost of sales data and provides the best control of inventory. If parts sales are costed on the basis of estimated percentages of retail selling prices of various inventory categories, percentages used should be verified by test checks of actual item costs over a 30-60 day period every six months. Office Management contains additional information on costing methods.
  • Parts sales in Accounts 5400/5401/5402, 5420/5421/5422, 5430/5431/5435, 5440/5441/5445 and 5470/5471/5475 include sales of accessories and tires for cars, trucks, recreation vehicles, tractors and implements. If necessary, separate sales accounts for accessories, tires, etc. may be established.
  • Freight on parts purchased should be charged to Account 7671, Freight—Parts.