Account Balances as of December 31
100000
110100
110150
110200
200600
200900
200910
200920
200930
210000
211000
212000
215000
216000
220000
220110
220210
220310
220400
220500
220600
220700
300100
300200
300300
300400
300500
300600
300700
300800
310000
320000
321000
322000
329000
329100
330010
600000
610000
620000
630000
640000
650000
650100
720000
720100
720200
720300
740000
740100
740200
740300
740400
740500
740600
740700
740800
740900
741000
741100
741200
741300
741400
741600
741700
741800
741900
742000
742100
760000
760100
770000
780000
Bank Account
Accounts Receivable (Direct Posting Account)
Allowance for Bad Debts
Interest Receivable
Inventory-Operating Supplies
Inventory-Raw Materials (Direct Post)
Inventory-Finished Goods (Direct Post)
Inventory-Trading Goods (Direct Post)
Inventory-Semi-finished Goods (Direct Post)
Prepaid Insurance
Prepaid Supplies
Prepaid Advertising
Prepaid Rent
Deposits on Purchases
Notes Receivable
Land (Direct Post)
Production Machinery, Equip & Fixtures(Dir.Post)
Accumulated Depreciation-Machinery (Direct Post)
Office Furniture
Accumulated Depreciation-Office Furniture
Office Equipment and Computers
Accumulated Depreciation – Office Equipment
Payables-Income Taxes
Accounts Payable (Direct Posting Account)
Payables-Interest
Payables-Short-Term Notes
Payables-Long-Term Notes
Payables-Commissions
Payables-Salaries and Wages
Accrued Expenses
Goods Receipt / Invoice Receipt Account
Accrued Tax – Output
Accrued Tax- Input
Unearned Revenues
Common Stock
Additional Paid-in-Capital
Retained Earnings (Direct Posting)
Sales Revenue
Sales Discount
Miscellaneous Revenue
Revenue Deductions
Gain or Loss on Sale of Assets
Customer Service Revenue
Customer Service Revenue Settlement
Raw Material Consumption Expense
Finished Product Consumption Expense
Trading Good Consumption Expense
Semi-Finished Consumption Expense
Supplies Expense
Telephone and Internet Expense
Legal and Professional Expense
Rent Expense
Insurance Expense
Payroll Expense-Office
Payroll Expense-Administrative
Sales Expense
Tax Expense – Property
Tax Expense- Income
Miscellaneous Expense
Warranty Expense
Bad Debt Expense
Information Technology Expense Account
Production Order Variance Expense Account
Manufacturing Output settlement
Manufacturing Output Settlement Variance
Depreciation Expense
Advertising Expense
Vendor Discounts Missed
Shipping Expense
Purchase Price Difference
Production Variance
Research and Development
Cost of Goods Sold
Debit Balance
$252,518
108,420
Credit Balance
2,500
750
32,000
281,298
66,474
5,000
1,000
425,000
915,000
305,000
47,900
110,000
988
3,063
1,000,000
618,009
2,087,460
2,087,460
General Journal
Date
Jounal Entry Event#
3-Jan
1
1
3-Jan
3-Jan
7-Jan
10-Jan
10-Jan
11-Jan
11-Jan
12-Jan
13-Jan
17-Jan
17-Jan
17-Jan
17-Jan
18-Jan
19-Jan
19-Jan
25-Jan
26-Jan
27-Jan
31-Jan
31-Jan
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
2
3
4
5
6
7
9
10
11
12
13
14
15
16
17
18
20
21
23
25
26
300700 Payables-Salaries and Wages
100000
Bank Account
to record payment of payroll from December
200920
200900
200920
200900
100000
300200
Inventory-Trading Goods (Direct Post)
Inventory-Raw Materials (Direct Post)
Inventory-Trading Goods (Direct Post)
Inventory-Raw Materials (Direct Post)
Bank Account
Accounts Payable (Direct Posting Account)
to record receipt of merchandise from Dallas Bike Basics
(shipping allocated by weight)
110000
110,000
110000
110,000
55,692
37,128
300
250
550
92,820
110100 Accounts Receivable (Direct Posting Account)
780000 Cost of Goods Sold
600000
Sales Revenue
200920
Inventory-Trading Goods (Direct Post)
to record sale to the Windy City Bikes
22,000
15,180
100000 Bank Account
110100
Accounts Receivable (Direct Posting Account)
to record receipt of payment on account
16,850
300800 Accrued Expenses
100000
Bank Account
to record payment to utility company
741900 Advertising Expense
212000
Prepaid Advertising
to record publication of advertisement in Italian Cycling Journal
200600 Inventory-Operating Supplies
300200
Accounts Payable (Direct Posting Account)
to record purchase of office supplies
22,000
15,180
16,850
988
988
1,000
1,000
350
350
100000 Bank Account
610000 Sales Discount
110100
Accounts Receivable (Direct Posting Account)
to record payment from Windy City Bikes
21,560
440
300200 Accounts Payable (Direct Posting Account)
100000
Bank Account
to record payment to Dallas Bike Basics
92,820
216000 Deposits on Purchases
100000
Bank Account
to record payment of deposit for barcoding system
22,000
92,820
3,000
3,000
300200 Accounts Payable (Direct Posting Account)
100000
Bank Account
to record payment to Lightbulb Accessory Kits
17,010
110100 Accounts Receivable (Direct Posting Account)
780000 Cost of Goods Sold
600000
Sales Revenue
200910
Inventory-Finished Goods (Direct Post)
to record sale to Rocky Mountain Bikes
128,130
79,441
200900 Inventory-Raw Materials (Direct Post)
300200
Accounts Payable (Direct Posting Account)
to record receipt of raw materials from Space Bikes
100,220
110150 Allowance for Bad Debts
110100
Accounts Receivable (Direct Posting Account)
to record Bunky’s bankruptcy – and write off of bad debt
100000 Bank Account
110100
Accounts Receivable (Direct Posting Account)
to record receipt of payment on account
300200 Accounts Payable (Direct Posting Account)
100000
Bank Account
to record payment to Staples
110100 Accounts Receivable (Direct Posting Account)
780000 Cost of Goods Sold
600000
Sales Revenue
320000
Accrued Tax – Output
200920
Inventory-Trading Goods (Direct Post)
to record sale to SoCal Bikes
17,010
128,130
79,441
100,220
1,610
1,610
89,960
89,960
350
350
2,501
1,380
2,300
201
1,380
212000 Prepaid Advertising
100000
Bank Account
to record payment of advertising for Bicycle Times
15,000
100000 Bank Account
780000 Cost of Goods Sold
600000
Sales Revenue
200910
Inventory-Finished Goods (Direct Post)
to record the shipment of goods to Beantown Bikes
27,450
17,092
300200 Accounts Payable (Direct Posting Account)
100000
Bank Account
to record payment to Night Rider Aluminum
30,890
15,000
27,450
17,092
30,890
320000 Accrued Tax – Output
100000
Bank Account
to record payment of sales taxes
3,063
215000 Prepaid Rent
100000
Bank Account
to record payment of rent
4,500
3,063
4,500
31-Jan
31-Jan
23
24
27
28
220210 Production Machinery, Equip & Fixtures(Dir.Post)
100000
Bank Account
216000
Deposits on Purchases
to record installation of the barcode system
110100 Accounts Receivable (Direct Posting Account)
780000 Cost of Goods Sold
600000
Sales Revenue
200910
Inventory-Finished Goods (Direct Post)
200920
Inventory-Trading Goods (Direct Post)
to record delivery of order to Big Apple
check figures
Adjusting Entries
31-Jan AE1
31-Jan AE2
31-Jan AE3
31-Jan AE4
31-Jan AE5
31-Jan AE6
31-Jan AE7
31-Jan AE8
7,195
4,195
3,000
390,805
234,680
390,805
169,586
65,094
1,528,835
741200 Bad Debt Expense
110150
Allowance for Bad Debts
to accrue for bad debt expense ($543,436 X 1/2%)
0
780000 Cost of Goods Sold
200920
Inventory-Trading Goods (Direct Post)
to record inventory discrepancy ($40,812 – 40,710)
0
740000 Supplies Expense
200600
Inventory-Operating Supplies
to record office supply expense ($1100 – $620)
0
741800 Depreciation Expense
220310
Accumulated Depreciation-Machinery (Direct Post)
to record depreciation expense ($915,000/(15*12))
0
741500 Utilities (electricity & phone)
300800
Accrued Expenses
to record utility expense
0
740400 Insurance Expense
210000
Prepaid Insurance
to record insurance expense (15,000/6)
0
700000 Labor
300700
Payables-Salaries and Wages
to accrue wages expense
0
740300 Rent Expense
215000
Prepaid Rent
to accrue rent expense
0
1,528,835
0
0
0
0
0
0
0
0
0
1,528,835
1,528,835
0
General Ledger
Beg.Bal.
txn totals
unadj.bal.
100000
252,518
0
252,518
Bank
Account
JE
0
0
Accounts
Receivable
(Direct
Posting
110100 Account)
108,420
0
108,420
JE
0
0
Allowance for
110150 Bad Debts
2,500 JE
0
0
adjustments
balance
0
2,500
0
750

0 AE1
252,518
108,420
2,500
Beg.Bal.
InventoryRaw
Materials
200900 (Direct Post)
32,000
InventoryFinished
Goods
200910 (Direct Post)
281,298
InventoryTrading
Goods
200920 (Direct Post)
66,474
txn totals
unadj.bal.
0
32,000
0
281,298
0
66,474
0
0
0
0
adjustments
balance
InventoryOperating
200600 Supplies
750
JE
0
0
281,298
66,474
0
0
0
0
0 AE3
750
InventorySemifinished
Goods
(Direct
200930 Post)
0
0
0
0 AE2
32,000
0
0
check figures
0
0
0
Beg.Bal.
txn totals
unadj.bal.
Prepaid
210000 Insurance
5,000
0
5,000
adjustments
balance
Prepaid
212000 Advertising
1,000
0
0
0
1,000
215000 Prepaid Rent
0
0
0
0
0
0
0
0 AE6
5,000
0
Beg.Bal.
220110 Land (Direct Post)
425,000
Production
Machinery,
Equip &
Fixtures(Dir.P
220210 ost)
915,000
txn totals
unadj.bal.
0
425,000
0
915,000
0
0
0
0
Accumulated
DepreciationMachinery
220310 (Direct Post)
305,000
0
0
0
305,000
0
0
0
0
0
0
221300 Buildings
0
0
0 AE4
balance
425,000
915,000
Beg.Bal.
Accounts
Payable
(Direct
Posting
300200 Account)
47,900
PayablesSalaries and
300700 Wages
110,000
0
0
0
47,900
adjustments
balance
0
0
0
adjustments
txn totals
unadj.bal.
0
0
0 AE8
1,000
0
0
Deposits
on
216000 Purchases
0
0
0
305,000
0
110,000
0 AE7
47,900
110,000
Accrued
300800 Expenses
988
0
0
0
988
0
Accrued
Tax –
320000 Output
3,063
0
0
0
3,063
0 AE5
988
3,063
Beg.Bal.
txn totals
unadj.bal.
Additional
Paid-in329100 Capital
Common
329000 Stock
1,000,000
0
0
330010 Retained Earnings (Direct Posting)
618,009
0
0
1,000,000
0
0
0
0
0
0
0
618,009
0
0
0
0
0
0
0
0
0
0
adjustments
balance
1,000,000
0
Sales
600000 Revenue
618,009
Sales
610000 Discount
0
Supplies
740000 Expense
700000 Labor
Beg.Bal.
8
txn totals
unadj.bal.
0
0
0
0
0
0
0
0
0
0
adjustments
0
0
0
balance
0
0
Rent
740300 Expense
0
0
AE7
0
Insurance
740400 Expense
0
0
0
AE3
0
Utilities
(electricity
741500 & phone)
Bad Debt
741200 Expense
Beg.Bal.
txn totals
unadj.bal.
0
0
adjustments
0
balance
0
0
0
Depreciation
741800 Expense
0
0
AE8
0
0
Advertising
741900 Expense
Beg.Bal.
0
0
0
0
0
AE6
0
0
Shipping
742100 Expense
0
0
0
0
AE1
0
0
Cost of
Goods
780000 Sold
0
0
AE5
txn totals
unadj.bal.
0
0
adjustments
0
balance
0
0
0
0
0
0
0
0
0
0
0
0
0
AE4
0
0
#REF!
0
0
0
#REF!
0
0
0
0
AE2
0
#REF!
#REF!
Beg.Bal.
txn totals
unadj.bal.
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
adjustments
balance
0
0
0
0
#REF!
#REF!
#REF!
#REF!
Beg.Bal.
txn totals
unadj.bal.
0
0
0
0
0
0
0
0
0
0
adjustments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
balance
0
0
#REF!
#REF!
0
0
#REF!
#REF!
Beg.Bal.
txn totals
unadj.bal.
0
0
0
0
0
0
0
0
0
0
0
0
0
0
adjustments
balance
0
0
0
0
Global Bike Inc. Trial Balance
Account
100000
110100
110150
110200
200600
200900
200910
200920
200930
210000
211000
212000
215000
216000
220000
220050
220060
220110
220210
220310
220400
220500
300100
300200
300300
300400
300500
300600
300700
300800
310000
320000
321000
322000
329000
329100
330010
600000
610000
700000
740000
740300
740400
741200
741500
741800
741900
780000
Beginning Balance
DR
CR
DB
Bank Account
252,518
0
Accounts Receivable (Direct Posting Account)
108420
0
Allowance for Bad Debts
0
2500
Interest Receivable
0
0
Inventory-Operating Supplies
750
0
Inventory-Raw Materials (Direct Post)
32000
0
Inventory-Finished Goods (Direct Post)
281298
0
Inventory-Trading Goods (Direct Post)
66474
0
Inventory-Semi-finished Goods (Direct Post)
0
0
Prepaid Insurance
5000
0
Prepaid Supplies
0
0
Prepaid Advertising
1000
0
Prepaid Rent
0
0
Deposits on Purchases
0
0
Notes Receivable
0
0
Fixed Assets
0
0
Accumulated Depreciation – Fixed Assets
0
0
Land (Direct Post)
425000
0
Production Machinery, Equip & Fixtures(Dir.Post)
915000
0
Accumulated Depreciation-Machinery (Direct Post)
0
305000
Office Furniture
0
0
Accumulated Depreciation-Office Furniture
0
0
Payables-Income Taxes
0
0
Accounts Payable (Direct Posting Account)
0
47900
Payables-Interest
0
0
Payables-Short-Term Notes
0
0
Payables-Long-Term Notes
0
0
Payables-Commissions
0
0
Payables-Salaries and Wages
0
110000
Accrued Expenses
0
988
Goods Receipt / Invoice Receipt Account
0
0
Accrued Tax – Output
0
3063
Accrued Tax- Input
0
0
Unearned Revenues
0
0
Common Stock
0
1000000
Additional Paid-in-Capital
0
0
Retained Earnings (Direct Posting)
0
618009
Sales Revenue
0
0
Sales Discount
0
0
Labor
0
0
Supplies Expense
0
0
Rent Expense
0
0
Insurance Expense
0
0
Bad Debt Expense
0
0
Utilities (electricity & phone)
0
0
Depreciation Expense
0
0
Advertising Expense
0
0
Cost of Goods Sold
0
0
2,087,460
2,087,460
Transactions
CR
0
0
0
DB
0
0
0
Ending Balance
CR
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
252,518
108,420
0
0
750
32,000
281,298
66,474
0
5,000
0
1,000
0
0
0
0
0
425,000
915,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,087,460
0
0
2,500
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
305,000
0
0
0
47,900
0
0
0
0
110,000
988
0
3,063
0
0
1,000,000
0
618,009
0
0
0
0
0
0
0
0
0
0
0
2,087,460
a
n
c
e
a
n
c
e
c
h
e
c
k DB
c
h
e
c EOM Closing Entries
k DB
DB
Adjustments
CR
DB
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Adjusted Balance
CR
252,518
0
108,420
0
0
2,500
0
0
750
0
32,000
0
281,298
0
66,474
0
0
0
5,000
0
0
0
1,000
0
0
0
0
0
0
0
0
0
0
0
425,000
0
915,000
0
0
305,000
0
0
0
0
0
0
0
47,900
0
0
0
0
0
0
0
0
0
110,000
0
988
0
0
0
3,063
0
0
0
0
0
1,000,000
0
0
0
618,009
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,087,460
2,087,460
95,043
0
0
0
0
0
0
0
0
0
0
0
0
Balance
DB
CR
252,518
0
108,420
0
0
2,500
0
0
750
0
32,000
0
281,298
0
66,474
0
0
0
5,000
0
0
0
1,000
0
0
0
0
0
0
0
0
0
0
0
425,000
0
915,000
0
0 305,000
0
0
0
0
0
0
0
47,900
0
0
0
0
0
0
0
0
0 110,000
0
988
0
0
0
3,063
0
0
0
0
0 1,000,000
0
0
0 713,052
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
95,043 2,087,460 2,182,503
100000
101000
110000
110100
110150
110200
200000
200100
200200
200300
200400
200500
200600
200900
200910
200920
200930
210000
211000
212000
215000
216000
220000
220050
220060
220110
220210
220310
220400
220500
220600
220700
220800
220900
221100
221200
221300
221400
300000
300100
300200
300300
300400
300500
300600
300700
300800
310000
320000
321000
322000
G/L Acct Long Text
Bank Account
Alternate Bank Account
Trade Accounts Receivables
Accounts Receivable (Direct Posting Account)
Allowance for Bad Debts
Interest Receivable
Inventory-Raw Materials
Inventory-Finished Goods
Inventory-Trading Goods
Inventory-Semi-finished Goods
Inventory-Production Supplies
Inventory-Suspense (Heaven)
Inventory-Operating Supplies
Inventory-Raw Materials (Direct Post)
Inventory-Finished Goods (Direct Post)
Inventory-Trading Goods (Direct Post)
Inventory-Semi-finished Goods (Direct Post)
Prepaid Insurance
Prepaid Supplies
Prepaid Advertising
Prepaid Rent
Deposits on Purchases
Notes Receivable
Fixed Assets
Accumulated Depreciation – Fixed Assets
Land (Direct Post)
Production Machinery, Equip & Fixtures(Dir.Post)
Accumulated Depreciation-Machinery (Direct Post)
Office Furniture
Accumulated Depreciation-Office Furniture
Office Equipment and Computers
Accumulated Depreciation – Office Equipment
Vehicles
Accumulated Depreciation-Vehicles
Intangible Assets
Accumulated Amortization – Intangible Assets
Buildings
Accumulated Depreciation – Buildings
Payables-Trade Accounts
Payables-Income Taxes
Accounts Payable (Direct Posting Account)
Payables-Interest
Payables-Short-Term Notes
Payables-Long-Term Notes
Payables-Commissions
Payables-Salaries and Wages
Accrued Expenses
Goods Receipt / Invoice Receipt Account
Accrued Tax – Output
Accrued Tax- Input
Unearned Revenues
329000
329100
330010
600000
610000
620000
630000
640000
650000
650100
700000
720000
720100
720200
720300
740000
740100
740200
740300
740400
740500
740600
740700
740800
740900
741000
741100
741200
741300
741400
741500
741600
741700
741800
741900
742000
742100
760000
760100
770000
780000
Common Stock
Additional Paid-in-Capital
Retained Earnings (Direct Posting)
Sales Revenue
Sales Discount
Miscellaneous Revenue
Revenue Deductions
Gain or Loss on Sale of Assets
Customer Service Revenue
Customer Service Revenue Settlement
Labor
Raw Material Consumption Expense
Finished Product Consumption Expense
Trading Good Consumption Expense
Semi-Finished Consumption Expense
Supplies Expense
Telephone and Internet Expense
Legal and Professional Expense
Rent Expense
Insurance Expense
Payroll Expense-Office
Payroll Expense-Administrative
Sales Expense
Tax Expense – Property
Tax Expense- Income
Miscellaneous Expense
Warranty Expense
Bad Debt Expense
Information Technology Expense Account
Production Order Variance Expense Account
Utilities (electricity & phone)
Manufacturing Output settlement
Manufacturing Output Settlement Variance
Depreciation Expense
Advertising Expense
Vendor Discounts Missed
Shipping Expense
Purchase Price Difference
Production Variance
Research and Development
Cost of Goods Sold
UA Webinar – MCC – Sum13
Chart of Accounts
Page
1
Date 06/03/2013
ChartofAccts GL00 GBI Global
G/L acct
100000
101000
110000
110100
110150
110200
200000
200100
200200
200300
200400
200500
200600
200900
200910
200920
200930
210000
211000
212000
215000
216000
220000
220050
220060
220100
220110
220200
220210
220300
220310
220400
220500
220600
220700
220800
220900
221100
221200
221300
221400
G/L Acct Long Text
Bank Account
Alternate Bank Account
Trade Accounts Receivables
Accounts Receivable (Direct Posting Account)
Allowance for Bad Debts
Interest Receivable
Inventory-Raw Materials
Inventory-Finished Goods
Inventory-Trading Goods
Inventory-Semi-finished Goods
Inventory-Production Supplies
Inventory-Suspense (Heaven)
Inventory-Operating Supplies
Inventory-Raw Materials (Direct Post)
Inventory-Finished Goods (Direct Post)
Inventory-Trading Goods (Direct Post)
Inventory-Semi-finished Goods (Direct Post)
Prepaid Insurance
Prepaid Supplies
Prepaid Advertising
Prepaid Rent
Deposits on Purchases
Notes Receivable
Fixed Assets
Accumulated Depreciation – Fixed Assets
Land
Land (Direct Post)
Production Machinery, Equipment and Fixtures
Production Machinery, Equip & Fixtures(Dir.Post)
Accumulated Depreciation –Production mach, Equip.
Accumulated Depreciation-Machinery (Direct Post)
Office Furniture
Accumulated Depreciation-Office Furniture
Office Equipment and Computers
Accumulated Depreciation – Office Equipment
Vehicles
Accumulated Depreciation-Vehicles
Intangible Assets
Accumulated Amortization – Intangible Assets
Buildings
Accumulated Depreciation – Buildings
300000
300100
300200
300300
300400
300500
300600
300700
300800
310000
320000
321000
322000
329000
329100
330000
330010
600000
610000
620000
630000
640000
650000
650100
700000
720000
720100
720200
720300
740000
740100
740200
740300
740400
740500
740600
740700
740800
740900
741000
741100
741200
741300
741400
741500
741600
741700
Payables-Trade Accounts
Payables-Income Taxes
Accounts Payable (Direct Posting Account)
Payables-Interest
Payables-Short-Term Notes
Payables-Long-Term Notes
Payables-Commissions
Payables-Salaries and Wages
Accrued Expenses
Goods Receipt / Invoice Receipt Account
Accrued Tax – Output
Accrued Tax- Input
Unearned Revenues
Common Stock
Additional Paid-in-Capital
Retained Earnings
Retained Earnings (Direct Posting)
Sales Revenue
Sales Discount
Miscellaneous Revenue
Revenue Deductions
Gain or Loss on Sale of Assets
Customer Service Revenue
Customer Service Revenue Settlement
Labor
Raw Material Consumption Expense
Finished Product Consumption Expense
Trading Good Consumption Expense
Semi-Finished Consumption Expense
Supplies Expense
Telephone and Internet Expense
Legal and Professional Expense
Rent Expense
Insurance Expense
Payroll Expense-Office
Payroll Expense-Administrative
Sales Expense
Tax Expense – Property
Tax Expense- Income
Miscellaneous Expense
Warranty Expense
Bad Debt Expense
Information Technology Expense Account
Production Order Variance Expense Account
Utilities (electricity & phone)
Manufacturing Output settlement
Manufacturing Output Settlement Variance
741800
741900
742000
742100
760000
760100
770000
780000
Depreciation Expense
Advertising Expense
Vendor Discounts Missed
Shipping Expense
Purchase Price Difference
Production Variance
Research and Development
Cost of Goods Sold
CASE STUDY
Journal Entries in an ERP
This assignment reviews basic accounting entries for a series of
transactions, emphasizes the integration of journals to the financial
statements, and introduces students to these journal entries in SAP ERP
Product
SAP ERP GBI
Release 6.04
Level
Undergraduate
Graduate
Beginner
Focus
Accounting Entries in Manual
and Automated Systems
Integration of Accounting
Journals
Authors
Jim Mensching
Nancy Jones
Contributors
Patti Brown
Version
1.0
MOTIVATION
This assignment is a review of
general financial accounting
principles and procedures. In the
first part of the assignment, you will
create general journal entries for a
series of transactions in Excel. For
the last part of the assignment you
will enter your “manual” journal
entries into the SAP ERP system.
The SAP system will then be used
to produce a set of financial
statements (balance sheet and
income statement).
Primary learning objectives are:
• Review the concepts of the
beginning financial
accounting course
• Review the accounting
cycle
• Work with a manual
accounting information
system
Secondary learning objective:
• Review basic Excel skills
PREREQUISITES
Before you use this case study, you
should be familiar with navigation in
the SAP system.
You should also be familiar with
Excel or other spreadsheet
programs.
Prior completion of the sample
problem provided with this
assignment is also recommended.
.
NOTES
This case study uses the Global Bike
Inc. (GBI) data set, which has
exclusively been created for SAP UA
global curricula.
© SAP AG
CASE STUDY
Assignment Overview
This assignment is a review of general financial accounting principles and procedures. In this
assignment you will create general journal entries for a series of transactions. You will also show the
impact of these transactions on a set of t-accounts and create a trial balance and adjusted trial balance.
You will then close out the income statement accounts as you would at year end. For the last part of
the assignment you will explore how your journal entries might be created in an automated system by
entering your “manual” journal entries into the SAP ERP system. The SAP system will then be used
to produce a set of financial statements (balance sheet and income statement).
Global Bike Inc. (GBI)
We will be working with a company called Global Bike Inc., (GBI). You may have seen GBI in other
classes if you have completed other SAP assignments. Information regarding GBI follows.
Company History
Global Bike Inc. has a pragmatic design philosophy that comes from its deep roots in both the offroad trail racing and long-distance road racing sports. Nearly 20 years ago, its founders designed
their first bikes out of necessity—they had races to win and the bikes that were available at the time
did not perform to their extremely high standards. So, they took matters into their own hands and
built legendary bikes that would outlast and outperform the competition. From these humble origins,
Global Bike Incorporated was born and continues to deliver innovative high-performance bicycles to
the world’s most demanding riders.
This heritage of entrepreneurial spirit and quest for design perfection is still the cornerstone of GBI’s
corporate philosophy. GBI produces bikes for the most demanding competitors—whether the
competition is on pavement or dirt, for money, fame or just bragging rights.
John Davis earned his racing scars in the mountain racing circuit in America, where he won numerous
downhill and cross-country championships. Early on, John realized that the mass-produced bicycles
available were inadequate in many ways for the type of racing he was doing. So, John stripped four
of his old bikes down to the bare metal and rebuilt them into a single “Frankenstein” bike that he rode
to win the national championship. Once news of his Frankenstein bike got out, John’s friends and
even his competitors began asking him to build them a Frankenstein bike too. While recovering from
an injury in 1990, John started producing the first series of Frankenstein bikes in his garage—each
one custom-built from cannibalized parts from other bikes. As more and more orders came in, John
successfully expanded Frankenstein Bikes from his garage operations into a full-blown manufacturing
facility in Dallas and began producing custom trail bikes which he sold through a network of
specialized bike dealers throughout the country.
At nearly the same time, halfway around the world in Heidelberg, Germany, Peter Schwarz was
studying engineering and competing in regional touring races on weekends. In between his races and
studies, Peter worked at a bike shop in Heidelberg, fixing student bikes and tuning the touring bikes
that he and his friends rode for competitions. As Peter’s reputation as a fierce competitor and
mechanical wizard grew, he also began to design and build road bikes based on an ultra-light
composite frame that he had created for one of his engineering courses. Peter’s innovative use of
carbon composite materials allowed him to build a frame that was significantly stronger and one tenth
the weight of competing frames. As a student, Peter did not have a great deal of financial resources,
© SAP AG
Page 2
CASE STUDY
so he partnered with a local company that manufactured his frame designs as a contract manufacturer.
Soon, Peter’s frames were being used by racers all over Europe and he started Heidelberg Composites
to market and design frames which would be fabricated by a contract manufacturer on a larger scale.
Heidelberg Composites sold its frames to specialized bike stores throughout Europe and directly to
racing teams, eventually becoming the leader in lightweight touring frames in Europe.
Through a twist of fate, Peter and John met each other in 2000 and immediately recognized their
mutual passion for performance and complimentary business models. Each had been looking for a
partner in another racing field and each had been looking for a partner in a different market. They
quickly realized that a merger between their two companies would be extremely synergistic and that
the combination of their product lines and regional distribution channels would generate a great deal
of efficiencies.
So, in 2001, Heidelberg Composites and Frankenstein Bikes merged to form Global Bike
Incorporated. Today, John and Peter share the responsibilities for managing GBI’s growing
organization as co-CEO’s. John is responsible for sales, marketing, service & support, IT, finance
and human resources groups and Peter is responsible for research, design, procurement and
manufacturing groups from an organizational reporting perspective.
GBI is a world class bicycle company serving the professional and “prosumer” cyclists for touring
and off-road racing. GBI’s riders demand the highest level of quality, toughness and performance
from their bikes and accessories.
Product Development
Product development is the most critical element of GBI’s past and future growth. GBI has invested
heavily in this area, focusing on innovation, quality, safety and speed to market. GBI has an extensive
innovation network to source ideas from riders, dealers and professionals to continuously improve the
performance, reliability and quality of its bicycles.
In the touring bike category, GBI’s handcrafted bicycles have won numerous design awards and are
sold in over 10 countries. GBI’s signature composite frames are world-renowned for their strength,
low weight and easy maintenance. GBI bikes are consistently ridden in the Tour de France and other
major international road races. GBI produces two models of their signature road bikes, a deluxe and
professional model. The key difference between the two models is the type of wheels used,
aluminum for the basic model and carbon composite for the professional model.
© SAP AG
Page 3
CASE STUDY
GBI’s off-road are also recognized as incredibly tough and easy to maintain. GBI trail bikes are the
preferred choice of world champion off-road racers and have become synonymous with performance
and strength in one of the most grueling sports in the world. GBI produces two types of off-road bike,
a men’s and women’s model. The basic difference between the two models is the smaller size and
ergonomic shaping of the women’s frame.
GBI also sells an accessories product line comprised of helmets, t-shirts and other riding accessories.
GBI partners with only the highest quality suppliers of accessories which will help enhance riders’
performance and comfort while riding GBI bikes. The accessories list is shown here as trading goods.
Information System
When the company first started, a manual accounting system was put in place. However, the
company has decided that it needs to computerize its accounting process to be more efficient. In
addition, in order to expand their sales to additional wholesale markets, Global Bike, Inc. (GBI) must
have EDI (electronic data interchange) capabilities by July 1. A project team has been established to
meet this deadline and the computerization of the accounting system is the first step in
implementation of the company’s new information system and their link to global partners. GBI uses
a perpetual inventory system to account for both product line inventories, bicycles and accessories, as
well as raw materials and work-in-process.
Consultants have configured the new computer system and it is ready to use. The books of the
company were closed on December 31st to prepare for the transition to the new system. The account
balances are now ready to be transferred to the new computer system. GBI will run parallel systems
during January; that is, they will record transactions in both the manual system and their new
computerized system to make sure the new system is set up properly. This is a standard business
practice that reduces the risks associated with implementing new systems.
Chart of Accounts for Global Bike, Inc.
The chart of accounts is a means of organizing general ledger accounts for grouping or sorting and to
generate financial statements. Generally a unique numeric code (although alphanumeric can also be
used) is given to an account based on its type. A block of code may be set aside for specific types of
accounts. For instance, in the case of GBI, account numbers 100000 through 109999 are reserved for
“cash” or liquid asset accounts. The entire set of codes and blocks of code is called the chart of
accounts. Global Bike’s chart of accounts follows:
© SAP AG
Page 4
CASE STUDY
G/L
Account
100000
110100
110150
110200
200600
200900
200910
200920
200930
210000
211000
212000
215000
216000
220000
220110
220210
220310
220400
220500
220600
220700
300100
300200
300300
300400
300500
300600
300700
300800
310000
320000
321000
322000
329000
329100
330010
600000
610000
620000
630000
640000
650000
650100
720000
720100
720200
720300
© SAP AG
G/L Acct Long Text
Bank Account
Accounts Receivable (Direct Posting Account)
Allowance for Bad Debt
Interest Receivable
Inventory-Operating Supplies
Inventory-Raw Materials (Direct Post)
Inventory-Finished Goods (Direct Post)
Inventory-Trading Goods (Direct Post)
Inventory-Semi-finished Goods (Direct Post)
Prepaid Insurance
Prepaid Supplies
Prepaid Advertising
Prepaid Rent
Deposits
Notes Receivable
Land
Production Machinery, Equipment and Fixtures
Accumulated Depreciation –Production mach, Equip.
Office Furniture
Accumulated Depreciation-Office Furniture
Office Equip and Computers
Accumulated Depreciation- Office Equipment
Payables-Income Taxes
Accounts Payable (Direct Posting Account)
Payables-Interest
Payables-Short-Term Notes
Payables-Long-Term Notes
Payables-Commissions
Payables-Salaries and Wages
Accrued Expense
Goods Receipt / Invoice Receipt Account
Accrued Tax – Output
Accrued Tax- Input
Unearned Revenues
Common Stock
Additional Paid-in-Capital
Retained Earnings (Direct Post)
Sales Revenue
Sales Discount
Miscellaneous Revenue
Revenue Deductions
Gain or Loss on Sale of Assets
Customer Service Revenue
Customer Service Revenue Settlement
Raw Material Consumption Expense
Finished Product Consumption Expense
Trading Good Consumption Expense
Semi-Finished Consumption Expense
Page 5
CASE STUDY
740000
740100
740200
740300
740400
740500
740600
740700
740800
740900
741000
741100
741200
741300
741400
741600
741700
741800
741900
742000
742100
760000
760100
770000
780000
Supplies Expense
Utilities Expense
Legal and Professional Expense
Rent Expense
Insurance Expense
Payroll Expense-Office
Payroll Expense-Administrative
Sales Expense
Tax Expense – Property
Tax Expense- Income
Miscellaneous Expense
Labor Expense
Bad Debt Expense
Information Technology Expense Account
Production Order Variance Expense Account
Manufacturing Output settlement