242A - Parts & Accessories - Subaru

Current Assets

Other Inventories

Synopsis

Account 242A

Debits

Credits

  1. The cost of all Subaru parts and accessories purchased, regardless of the source. 

  2. The increase in book value for Subaru parts and accessories on hand as disclosed by physical count, or stock appreciation.

  1. The cost of all Subaru parts and accessories sold.

  2. The decrease in book value for Subaru parts and accessories on hand as disclosed by physical count, or depreciation.

  3. The write-off at cost of all obsolete and scrapped Subaru parts and accessories  removed from inventory.

 

 

Remarks:

Incentives and discounts earned on the quantity and method of purchase should not affect the inventory value but should be credited directly to Parts & Accessories Purchase Discount (Account 494A).

 

Transportation charges should be debited to the Freight & Express/Postage (Account 76).

 

Parts should be individually costed at dealer price as shown in the Subaru distributor parts price book.  A percentage method of costing is not recommended.

 

The offsetting entry for obsolete and scrapped parts should be Adjustment – Subaru P & A Inventory (Account 675A).

 

Inventory control and maximization programs within the dealership DMS system should be utilized to assure purchases in quantities sufficient to obtain maximum discounts, minimize shrinkage losses, and avoid an unbalanced stock.

 

It is recommended that parts and accessories on hand be verified by a physical inventory at least once each year and more often, if necessary.

 

Dealers using the LIFO method of accounting should refer to Account 242C.

 

Tires purchased from the OEM, or outside vendors, should be inventoried in Account 249 – Tire Inventory.

Note: