Sales—Parts—ESP – Ford Online Accounting Manual

Sales and Cost of Sales

SALES—PARTS—ESP		ACCOUNT
	SALES		5440/5441/5445
	COST OF SALES		6440/6441/6445

ACCOUNT EXPLANATION
TRANSACTIONS
COMMENTS

ACCOUNT EXPLANATION

Sales: Selling price of parts installed in dealer’s repair shop and sold to customers on completed repair orders, including fleet owners and insurance companies, under any Extended Service Plan.

NOTE: Dealers with competitive franchises (Non FoMoCo) separate parts and report FoMoCo (franchise) parts in Account 5440/6440 and Non FoMoCo (other franchises) in Account 5441/6441.

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers

TRANSACTIONS

			Jrnl.	Dr.	Cr.

Repairs to a customer’s car under any Extended Service Plan			PS
	Cash Sales—Clearing (customer’s deductible)			1010
	Ford Receivable—Extended Service Plan			1185
	Other Receivable—Extended Service Plan			1130
		Sales—Parts—Service—Contracts Franchise/Non Franchise			5440,5441
		Sales—Parts—Quick Lane—Service Contracts			5445
	Cost of Sales—Parts—Service—Contracts—Franchise/Other			6440,6441
	Cost of Sales—Parts—Service—Contracts—Quick Lane			6445
		Inventory—Parts—Ford/Other			1400,1410
		Inventory—Parts—Quick Lane/Tires			1405,1406

COMMENTS

The accounting entries for Extended Service Plans offered by the dealership that are sponsored by the dealership or outside independent sources are basically the same as for the company Extended Service Plan with the following exceptions:
- Plan Sponsored by the Dealership—Any liability established upon advice of tax counsel should be recorded in a sub-account of Other Liabilities—Account 2700.
- Plans sponsored by Outside Independent Sources—Claims for reimbursement of repairs performed under these plans should be charged to a sub-account of Accounts Receivable—Other, Account 1130.
Sales taxes on the sale of Extended Service Plans (or on the sale of parts/service under the plans) should be collected and remitted in accordance with the regulations of the state where the dealership is located.