How To Account For Floor Plan Inventory. Since dealers may send cars off the lot for demonstration purposes or possibly for minor maintenance items it is a good idea for the floor plan lender to notify the dealer in advance as to when the collateral inspection will take place so that it. That all assets acquired under the floor planning arrangement be sold at a price that is no lower than its original purchase price.
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Inspections of collateral inventory should be carried out periodically by the floor plan lender. To do this subtract your monthly selling expenses from your total expenses for the month. That all assets acquired under the floor planning arrangement be sold at a price that is no lower than its original purchase price.
This booklet addresses the risks associated with floor plan lending and discusses risk management practices for floor plan lending.
Hello You would record the debit to inventory in the normal way but would record a credit to notes payable equipment or inventory to account for the floor plan. Using cash or a bank line of credit to purchase inventory can work for some car dealers but many floor plan financing companies offer a variety of dealer-specific benefits. The floor plan may depict an entire building one floor of a building or a single room. This is Rule 1 when it comes to floor plan financing.
