250 – Non-Automotive Merchandise

Current Assets

Other Inventories

Synopsis

Account 250

Debits

Credits

  1. The cost of both new and used non-automotive merchandise regularly stocked and intended for resale.  This should include items such as appliances, boats, marine engines, golf carts, farm implements, hardware, snowmobiles, industrial engines, and parts related to these items.

  2. The cost of any such item placed in demonstrator service.

  3. The cost of labor and material for re-conditioning such used items.

  1. The inventory value of merchandise sold or otherwise removed.

  2. The write-down of inventory value based on reappraisal of used units.

 

 

Remarks:

A physical inventory should be taken each month-end and reconciled with the balance in this account.

 

A separate subsidiary inventory record for each unit should be prepared at the time of acquisition, listing the stock number, description, optional equipment, and unit cost.

 

All new units should be recorded at the time of purchase in the new vehicle purchase journal.

 

In all instances where new units are purchased from, sold to, or traded with other direct dealers, they are considered transfers and should, therefore, be recorded in the new vehicle purchase journal.

 

Stock numbers should be assigned each unit in numerical sequence.

 

Retailers engaged in the sale of tractors and farm implements, trailer homes and specialty trailers, boats and marine engines, appliances, etc. on a large scale, may find it advantageous to form a subsidiary company and accounting system.  It is recommended that the dealer consult legal and tax counsel regarding the advantages, if any, of subsidiary or separate companies.

 

This account should NOT be used for boats, airplanes, or other assets purchased by the retailer that are not a part of the retailer's normal trade business.  Assets such as personal boats or airplanes should be classified in Account 296 – Other Non-Automotive/Intangible Assets.

Note: