Accounting Questions.

[Gerry Laughlin]

Thank you Dale, we are on the exact same page.

Gerry

[GRH89]

I USE ACCOUNT 688 FOR MY ADJUSTMENTS. WE BUY AC DELCO FROM A LOCAL WD. SO I TAKE THAT DISCOUNT AND ADJUST IT TO 688 ON THE PURCHACE ORDER. EX. IF GM COST IS $55.00 AND WE PAY $50.00 FOR THE PART WE ADJUST THE DIFFERANCE TO 688. WE USE THE OTHER OPTION ON THE REYNOLDS PARTS PO. I ALSO TAKE MY ADJUSTMENTS FROM PARTS BOUGHT FROM OTHER DEALERS WHICH ARE PRICED AT TRADE TO 688. THE DISCOUNT FROM THE AC/DELCO PARTS USUALLY OFFSET THE DIFFERANCE. AND ANY LEFT OVER DEBIT GOES STRAIGHT TO THE BOTTOM LINE.

[scotstrong]

GRH89:
If you are using account 688 to book purchase discounts (instead of 687 which is where they should go according to GM standard accounting manual) where are you booking appreciation and/or depreciation from your monthly price update tapes (this is what account 688 is intended for according to the same manual)? Where are you booking the discount from GMSPO parts invoices to? If you do as suggested in the above post by Gerry Laughlin and book the premium paid to another dealer for warranty parts to account 680 (cost of warranty parts sales), this gives you a much more accurate picture of how profitable your warranty sales really are. Otherwise, it just gets buried along with everything else that legitimately should go to purchase discounts (687). This also gives a much more accurate picture as to whether your inventory is generating profit or if you are living off of other dealers' inventories.

[This message has been edited by scotstrong (edited 10-29-2002).]