October 30, 2016 admin

Service Labor—ESP

Sales and Cost of Sales

SERVICE LABOR—ESP ACCOUNT
SALES  5710/5711/5715
COST OF SALES  6710/6711/6715

ACCOUNT EXPLANATION

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

NOTE: Dealers with competitive franchises (Non FoMoCo) separate service labor and report FoMoCo (franchise) labor in Account 5710/6710 and Non FoMoCo (other franchises) in Account 5711/6711.

*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 an Extended Service Plan PS
    Cash Sales (customer’s deductible) 1010
    Ford Receivable—Extended Service Plan 1130
      Sales—Labor—Service Contracts Franchise/Other 5710,5711
      Sales—Labor—Service Contracts Quick Lane 5715
    Cost of Sales—Labor—Service Contracts Franchise/Other 6710, 6711
      Cost of Sales—Labor—Service Contracts Quick Lane 6715  
      Inventory—Labor in Process 1440
COMMENTS
  • 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.