October 30, 2016 admin

Sublet Repairs—Service

Sales and Cost of Sales

SUBLET REPAIRS—SERVICE ACCOUNT
SALES  5750/5755
COST OF SALES  6750/6755

ACCOUNT EXPLANATION

Sales: Selling price of repair work (except body work) performed by outside vendors and charged to customers on completed repair orders. Includes sublet warranty work and sublet work performed on dealership-owned vehicles.

Cost of Sales: Cost of above work.

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Customer’s radiator repaired by outside vendor on open account PS
    Accounts Receivable—Service 1121
      Sales—Sublet Repairs (at retail) 5750
      Sales—Sublet Repairs (at retail)—Quick Lane 5755
    Cost of Sales—Sublet Repairs (sale at cost) 6750
    Cost of Sales—Sublet Repairs (sale at cost)—Quick Lane 6755
      Inventory—Sublet Repairs 1441
             
  Cylinder rebore by outside vendor on used car reconditioning repair order I
    Inventory—Used Cars 1350
      Sales—Sublet Repairs 5750
      Sales—Sublet Repairs—Quick Lane 5755
    Cost of Sales—Sublet Repairs (sale at cost) 6750
    Cost of Sales—Sublet Repairs (sale at cost)—Quick Lane 6755
      Inventory—Sublet Repairs 1441
COMMENTS
  • Internal sales of sublet repairs should be recorded at actual cost, without mark-up, as the dealership has not incurred any overhead costs thereon.
  • To insure that customers are billed on repair orders for applicable sublet repairs, a purchase order should be issued for each sublet transaction and the purchase order, repair order and vendor invoice should be appropriately cross-referenced.