|AM 3630 – Dealership Accounting|
|1.||Post the following transactions using the general journal:|
|A. A wholesaler has a 2006 Taurus for $10,200, a 2004 F-150 for $20,100 and a 2002 Explorer for $15,500 you want to purchase for the used car lot. A single check can be cut for all three vehicles at once through a payable account. (Hint: There a two transactions in the journal.) Assign stock numbers UC0004, UT0002, and UT0003.|
|B. A new Ford F-150 is stocked in to the dealership. The VIN is 2FRX17284CA8433. MSRP is $25,200 and the Invoice cost is $21,500.00. Ford allows a $70.00 Advertising Allowance, a $215.00 Floor Plan Allowance, and $95.00 for Prep & Conditioning. Holdback is 3% of MSRP. The stock number assigned to the vehicle is NT50001.|
|C. A new Ford Mustang Convertible is stocked in to the dealership. The VIN is 1FAFP44684F194183. MSRP is $25,400.00 and the Invoice cost is $23,500.00. Ford allows an $85.00 Advertising Allowance, a $225.00 Floor Plan Allowance, and $80.00 for Prep & Conditioning. Holdback is 3% of MSRP. The stock number assigned to the vehicle is NC50001.|
|D. A customer paying cash from an outside finance source agrees to a base selling price of $25,000.00 for the Mustang Convertible you stocked in during C. The customer does not want insurance but does agree to purchase an ESP for $750.00 which costs the dealership $350.00. There are no rebates on this vehicle. The customer’s trade in is valued at $4,000.00 and the dealership allows $4,500.00 and there is no outstanding lien. Tax is 5% of the base vehicle selling price. License and registration is $375.00 and there is a $100.00 documentation processing fee.|
|E. A customer agrees to a base selling price of $23,500.00 for the Ford F-150 you stocked in on B. They also opt for a Credit Life Insurance Policy for $900.00 and an ESP contract for $700.00. The Insurance costs the dealership $550.00 and the ESP contract costs $300.00. The customer put a $500.00 deposit down initially and will pay an additional $2,500.00 cash down. The customer is also applying a $500.00 rebate to the down payment. The Customer has a trade in worth $6,000.00 and the dealership allows $7,000.00. The outstanding lien balance on the trade is $4,000.00. Tax is 5% of the base selling price of the vehicle and there are license and registration fees of $400.00. The dealership charges $150.00 for documentation processing fees. The reserve on the financing is $2,000.00 and the dealer retains 70%.|
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