Auto Dealerships - Audit Technique Guide - Uncle Fed's Tax*Board
Auto Dealerships - Audit Technique Guide - Uncle Fed's Tax*Board
Auto Dealerships - Audit Technique Guide - Uncle Fed's Tax*Board
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will assume that the average base vehicle cost for model 9100A was $29,756 and for model<br />
9010A was $16,810.<br />
# of Vehicles Preceding Year’s Total<br />
Item in Current Year’s Average Base Average Base<br />
Category Ending Inventory Vehicle Cost Vehicle Cost<br />
9100A, LS400 3 $29,756 $ 89,268<br />
9010A, ES250 2 16,810 33,620<br />
Based vehicle cost of ending inventory<br />
at prior year based vehicle cost $122,888<br />
Step # 7<br />
Compute the current year index.<br />
$126,747 divided by $122,888 = 1.0314<br />
Step # 8<br />
Compute the cumulative index.<br />
The cumulative index at the beginning of the year of change was 1.0000 due to restatement.<br />
Restatement is discussed later in this section.<br />
1.0000 x 1.0314 = 1.0314<br />
Step # 9<br />
Compute the total current year total vehicle cost by adding together the total invoice costs.<br />
(NOTE: not base cost only)<br />
Stock Model<br />
Number Number Description Amount<br />
45810 9100A LS400 4-DR Sedan $ 33,065.00<br />
45820 9010A ES250 4-DR Sedan 19,079.00<br />
45822 9100A LS400 4-DR Sedan 35,633.00<br />
45853 9100A LS400 4-DR Sedan 33,777.00<br />
45854 9010A ES250 4-DR Sedan 18,941.50<br />
$140,495.50<br />
9-7
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