October 30, 2016 admin

Parts Return and Handling Charges

Sales and Cost of Sales

PARTS RETURN AND HANDLING CHARGES ACCOUNT
6580/6571

ACCOUNT EXPLANATION

Costs pertaining to over-returns of parts to Ford Motor Company.

Small Order Handling Charges.

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers
TRANSACTIONS
  Jrnl. Dr. Cr.
  Parts return under the over-return program G
    Ford Receivable—Other 1200
    Ford—Discount Earned 6550
    Ford—Discount Earned—QL/FL/QCSC 6565
    Parts Return and Handling Charges 6580
    Parts Return and Handling Charges—QL/FL/QCSC 6571
      Inventory—Parts—Ford/Other 1400, 1410
      Inventory—Parts—QL/FL/QCSC 1406
             
  Small order handling charges
* Unit down order		 P
    Inventory—Parts—Ford/Other 1400, 1410
    Inventory—Parts—QL/FL/QCSC 1406
    Parts Return and Handling Charges   6580
    Parts Return and Handling Charges—QL/FL/QCSC   6571
      Accounts Payable—Trade     2100
           
  *Critical order  
    Inventory—Parts—Ford/Other   1400, 1410
    Inventory—Parts—QL/FL/QCSC   1406
    Parts Return and Handling Charges   6580  
    Parts Return and Handling Charges—QL/FL/QCSC   6571  
      Accounts Payable—Trade     2100
COMMENTS
  • Refer to Ford Motor Company instructions for the Parts Inventory Protection Plan as the dollar amounts may vary between unit down orders and critical orders.
  • The small order handling charges should be recorded in Account 6580, Parts Return and Handling Charges, even if these costs are passed on to the customers.