October 30, 2016 admin

Body Shop Materials

Sales and Cost of Sales

BODY SHOP MATERIALS ACCOUNT
SALES  5850
COST OF SALES  6850

ACCOUNT EXPLANATION

Sales: Selling price of body shop materials sold to customers on completed repair orders. Includes body shop materials used in warranty work.

Cost of Sales: Cost of body shop materials used on above work.

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers
TRANSACTIONS
  Jrnl. Dr. Cr.
  Body shop material sold to customer on repair order for cash PS
    Cash Sales—Clearing 1010
      Sales—Body Shop Materials 5850
    Cost of Sales—Body Shop Materials 6850
      Inventory—Body Shop Materials 1442
             
  Paint materials used in reconditioning used car for lot display I
    Inventory—Used Cars 1350
      Sales—Body Shop Materials (at internal rate) 5850
    Cost of Sales—Body Shop Materials 6850
      Inventory—Body Shop Materials 1442
           
  Adjustment to increase inventory account to agree with physical inventory SE  
    Inventory—Body Shop Materials   1442
      Cost of Sales—Body Shop Materials     6850
COMMENTS
  • Body shop materials include paint, thinner, lead, masking tape, rubbing compound, sanding discs, and undercoat.
  • Internal body shop material sales should be recorded at an internal rate established by the dealer, but not in excess of the retail selling price.
  • Due to the nature of body shop materials and the manner in which they are used, the cost of body shop materials sales, in most instances, can only be estimated, usually in relation to sales amounts—except for paint.
  • Paint which is purchased for use on specific jobs may be tracked separately; establish Account 5851/6851 for this purpose.
  • Tax counsel should be consulted regarding tax considerations in the sale and use of body shop materials.