507 – Paint, Material, & Miscellaneous

Body Shop Department

Sales Synopsis

Account 507

Debits

Credits

 

  1. The actual selling price of all body and paint shop materials sold on Body Shop repair orders.

  2. The adjustment required when the physical inventory is more than the account (book) balance.

707 – Paint, Material, & Miscellaneous

Body Shop Department

Cost of Sales Synopsis

Account 707

Debits

Credits

  1. The cost of all shop materials including undercoating, rubbing compounds, etc. sold and used on Body Shop repair orders.

  2. The adjustment required when the physical inventory is less than the account (book) balance.

 

 

Remarks:

These accounts should be used only by retailers having their own body and paint operation.

 

It is recommended that materials be individually costed on each repair order; however, materials may be costed on a percentage basis developed by experience.

 

The total cost of pint and quart cans of thinner and paint should be charged out as each can is opened.  Once opened, thinner evaporates and paint hardens, therefore, open cans should not be inventoried at month-end.

 

Adequate internal controls should be maintained in dispensing and securing these materials.