Understanding the financials for Global Bike

[Former Member]

I am in the process of developing a course titled Applied Corporate Finance using SAP at the University of Tampa. I am using the Global Bike client. I pulled a copy of the Chart of Accounts and financial statments for Global Bike. There were a few items that I do not understand. I am not clear on why the inventory acounts (200000, 200100, 200200, 200300, 200400, 200500, and 200600) are listed under long term assets. The other thing I am not sure of is what Inventory -Suspens (Heaven) 200500 is supposed to represent. Any help would be appreciated.

[SMagal · Accepted solution]

I am assuming that you are referring to the Financial Statement Version GL00 where the inventory accounts are listed under Long Term Assets. This is an error. They should be under short term assets. The Financial Statement Version is only used for reporting - B/S and I/S. So this is easily corrected. We will correct it in the next release of GBI.

I will create a solution document to correct it and post it to the forums early next week..

The Inventory-Suspense (Heaven) account is used to record initial balances of inventory in the system. Normally materials are received into inventory vis goods receipt which debits the inventory account and credits the GR/IR account. When you just want to add inventory to show the starting balances when the system "goes live" then the suspense account is the offseting account.

Adding inventory into the system to show the initial balances is often referred to "inventory from heaven."

Hope this helps. Others with deeper Accounting knowledge can provide a more in-depth explanation

Also, I would like to know more about the content you are creating for the Corporate Finance course. Please PM me with some information, if you don't mind sharing.

[Former Member · Accepted solution]

Simha,

Thank you for your response. I am developing an applied corporate finance course using SAP at the University of Tampa. I will keep you informed as I develop the material and would be happy to share what I develop with you if interested. The first case I am developing for Global Bike requires the students to pull the chart of accounts, balance sheet, and profit and loss statements to gather data required for ratio analysis. The case will provide the financial data for a size and industry matched portfolio of firms. The student will then have to make an assessment of the current financial condition of Global Bike. Two other cases are also being developed for the course. The next case will look at long-term and short-term financing options as Global Bike considers purchasing a production facility. The third case will look at cash management and the use lock boxes to speed up the collection of accounts receivable. The course should be finished by the end of next month.

Speros