Setting up automatic postings from the Inventory Control Module to the General Ledger module primarily involves to programs: IC to GL Posting F/M and IC GL Posting Table F/M.
First, use IC GL Posting Table F/M to create and maintain GL posting tables for Inventory accounts.
Next, use the IC to GL Posting F/M to determine how the Inventory accounts should post.
You can determine the detail of the journal entries posted through the GL Distribution flag. The flag may be set to one of the following: 0-indicating no GL distribution is printed or posted; 1-indicating the GL distribution is printed (printing is in detail format) but not posted to GL; 2-indicating the GL distribution is printed (printing is in detail format) and posted to GL in detail (posting includes each item contributing to the amount for each account number).
Through the Adjustments Journal, you can determine which GL journal (where in the general ledger journal file) to post transactions from the Adjustments Register. Through the Transfers Journal the user determines which GL journal (where in the general ledger journal file) to post transactions from the Transfers Shipment and Receiving Registers.
Through the Post by Branch flag, you can indicate whether to post inventory transactions by branch, i.e., insert the branch in the GL account number when posting. For example, if the GL number to post is 415-00-0 (where the branch is in the last position) and the branch is 3, the account number posted is 415-00-3.
You can also establish whether to post adjustment to general ledger by the G-account number assigned to the adjustment in the GL posting table (GL Posting Table F/M) or the A-account number assigned to the adjustment code. If the flag is set to A-adjustment, the GL number assigned to the code is posted when entering an adjustment. If the flag is set to G-GL posting table, the GL number in the GL posting table is posted. If the flag is set to G, the adjustment codes type determines whether to post to the A-adjustment, R-receipts or S-sales GL number.
The Inventory Control transactions that may print a GL distribution and post to GL are the transactions from the Adjustments Register, Transfers Shipment Register and Transfers Receiving Register.
Establish a set of valid GL posting tables in this program. Once the posting tables are in place, you can assign each item is assigned to a table, which in turn determines the correct GL account numbers to post to when posting a transaction to General Ledger for that item. The posting tables determine the General Ledger distribution after the printing of various registers throughout the system.
The following registers may use the GL account numbers set up in the IC GL posting table(s):
For our example, there are two types of items on the system: dock equipment and warehouse equipment. If dock equipment items and warehouse equipment items are to be posted separately to general ledger, we will set up two GL posting tables; one to assign to dock equipment items and one to assign to warehouse equipment items.
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*. GL TABLE DOC |
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2. DESCRIPTION DOCK EQUIPMENT |
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GL # |
DESCRIPTION |
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3. INVENTORY |
170-01-01 |
INVENTORY-DOCK |
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4. SALES |
410-01-01 |
SALES-DOCK |
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5. COST OF GOODS |
520-01-01 |
COST OF GOODS-DOCK |
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6. RECEIPTS |
390-01-01 |
RECEIPTS-DOCK |
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7. ADJUSTMENTS |
530-01-01 |
ADJUSTMENTS-DOCK |
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8. IN TRANSIT |
180-01-01 |
IN TRANSIT-DOCK |
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9. PHYSICAL DISCREP. |
530-01-01 |
ADJUSTMENTS-DOCK |
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10. MC FINISHED GOODS |
200-01-01 |
FINISHED-DOCK |
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11. COMPONENTS |
210-01-01 |
COMPONENTS-DOCK |
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12. MISC. SALES |
420-01-01 |
MISC SALES-DOCK |
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13. NONSTOCK INVENTORY |
190-01-01 |
NON-INV-DOCK |
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14. INTER-WHS XFER IN |
180-01-01 |
INTER-WHS XFER IN-DOCK |
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15. INTER-WHS XFER OUT |
200-01-01 |
INTER-WHS XFER OUT-DOCK |
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16. INTERWHSE COGS |
531-01-01 |
INTERWHSE COGS-DOCK |
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17. NON INVENTORY |
177-01-01 |
NON INVENTORY-DOCK |
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*. GL TABLE WHS |
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2. DESCRIPTION WAREHOUSE EQUIPMENT |
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GL # |
DESCRIPTION |
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3. INVENTORY |
175-01-01 |
INVENTORY-WHS |
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4. SALES |
415-01-01 |
SALES-WHS |
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5. COST OF GOODS |
525-01-01 |
COST OF GOODS-WHS |
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6. RECEIPTS |
395-01-01 |
RECEIPTS-WHS |
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7. ADJUSTMENTS |
535-01-01 |
ADJUSTMENTS-WHS |
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8. IN TRANSIT |
185-01-01 |
IN TRANSIT-WHS |
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9. PHYSICAL DISCREP. |
535-01-01 |
ADJUSTMENTS-WHS |
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10. MC FINISHED GOODS |
205-01-01 |
FINISHED-WHS |
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11. COMPONENTS |
215-01-01 |
COMPONENTS-WHS |
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12. MISC. SALES |
425-01-01 |
MISC SALES-WHS |
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13. NON STOCK INVENTORY |
195-01-01 |
NON INV-WHS |
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14. INTER-WHS XFER IN |
185-01-01 |
INTER-WHS XFER IN-WHS |
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15. INTER-WHS XFER OUT |
205-01-01 |
INTER-WHS XFER OUT-WHS |
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16. INTERWHSE COGS |
531-01-01 |
INTERWHSE COGS-WHS |
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17. NON INVENTORY |
177-01-01 |
NON INVENTORY-WHS |
The following examples use the GL posting tables listed previously. The examples include all registers that use the IC GL posting tables. We will use two items: hand truck which is assigned to the DOC GL posting table (cost is $115.00) and pallet which is assigned to the WHS GL posting table (cost is $23.00).
Two adjustments are entered: one to increase the on-hand quantity by one for the hand truck and one o increase the on-hand quantity by one for the pallet. Using the GL posting tables, the GL distribution prints as follows:
If the adjustment type is set to A-adjustment (in the Adjustment code F/M):
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Debit |
Credit |
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170-01-01 Inventory-Doc |
115.00 |
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175-01-01 Inventory-Whs |
23.00 |
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530-01-01 Adjustments-Doc |
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115.00 |
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535-01-01 Adjustments-Whs |
______ |
23.00 |
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138.00 |
138.00 |
If the adjustment type is set to R-receipt (in the Adjustment Code F/M):
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Debit |
Credit |
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170-01-01 Inventory-Doc |
115.00 |
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175-01-01 Inventory-Whs |
23.00 |
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390-01-01 Receipts-Doc |
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115.00 |
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395-01-01 Receipts-Whs |
______ |
23.00 |
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138.00 |
138.00 |
If the adjustments are negative and the adjustment type is set to S-sales (in the Adjustment Code F/M):
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Debit |
Credit |
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170-01-01 Inventory-Doc |
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115.00 |
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175-01-01 Inventory-Whs |
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23.00 |
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520-01-01 Cost of Goods |
115.00 |
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525-01-01 Cost of Goods |
23.00 |
______ |
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138.00 |
138.00 |
If a physical discrepancy occurs when performing a physical, the discrepancy posts to the adjustments file. If there is a negative one discrepancy of the hand truck and a positive one discrepancy of the pallet, using the GL posting tables, the GL distribution prints as follows:
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Debit |
Credit |
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170-01-01 Inventory-Doc |
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115.00 |
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175-01-01 Inventory-Whs |
23.00 |
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530-01-01 Adjustments-Doc |
115.00 |
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535-01-01 Adjustments-Whs |
______ |
23.00 |
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138.00 |
138.00 |
Two items are being transferred to a satellite warehouse: on-hand truck and one pallet. Using the GL posting tables, the GL distribution prints as follows:
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Debit |
Credit |
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170-01-01 Inventory-Doc |
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115.00 |
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175-01-01 Inventory-Whs |
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23.00 |
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180-01-01 In transit-Doc |
115.00 |
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185-01-01 In transit-Whs |
23.00 |
______ |
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138.00 |
138.00 |
The two items shipped in the previous register are now received into the satellite warehouse. Using the GL posting tables, the GL distribution prints as follows:
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Debit |
Credit |
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170-01-01 Inventory-Doc |
115.00 |
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175-01-01 Inventory-Whs |
23.00 |
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180-01-01 In transit-Doc |
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115.00 |
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185-01-01 In transit-Whs |
_______ |
23.00 |
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138.00 |
138.00 |
If the hand truck and pallet are used to produce for example a bill of material item, below is an example of how BOM and formula production is posted to general ledger.
Production Register
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Component cost-hand truck |
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115.00 |
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Component cost-pallet |
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23.00 |
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Total component cost |
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138.00 |
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Overhead cost |
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5.00 |
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Package cost |
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3.00 |
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Labor cost |
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4.00 |
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_______ |
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Total cost to produce |
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150.00 |
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Using the GL posting tables for producing a finished item in a different GL posting table the GL distribution posts as follows:
GL distribution
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Debit |
Credit |
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170-01-01 |
Inventory-Doc |
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115.00 |
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175-01-01 |
Inventory-Whs |
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23.00 |
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*173-01-01 |
Inventory General |
150.00 |
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**250-01-01 |
Overhead |
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5.00 |
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**260-01-01 |
Package |
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3.00 |
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**270-01-01 |
Labor |
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4.00 |
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*203-01-01 |
MC Finished Goods-General |
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138.00 |
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210-01-01 |
MC Components-Doc |
115.00 |
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215-01-01 |
MC Components-Whs |
23.00 |
_____ |
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288.00 |
288.00 |
* indicates GL number is pulled from a IC GL posting table not used in our example
** indicates GL number is not created in the IC GL posting tables. May be created in the Manufacturing GL posting control record.
One hand truck and one pallet are ordered in the PO system. When the order is delivered and the receipt is entered the inventory and receipts GL numbers are only used if they are posted to GL by the IC GL posting table as assigned in the PO to GL posting record (see the PO to GL Posting F/M). If inventory and receipts are set to post to GL by IC posting tables, the distribution prints as follows:
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Debit |
Credit |
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170-01-01 Inventory-Doc |
115.00 |
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175-01-01 Inventory-Whs |
23.00 |
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390-01-01 Receipts-Doc |
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115.00 |
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395-01-01 Receipts-Whs |
_____ |
23.00 |
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138.00 |
138.00 |
One hand truck is sold for $145.00 (cost is $115.00), one pallet is sold for $30.00 (cost is $23.00), one plastic pallet (considered a miscellaneous sales warehouse equipment item) is sold for $25.00 (cost is $18.00) and a special order dock equipment item is sold for $15.00 (cost is $12.00). When sold, the inventory sales cost of goods and miscellaneous sales GL numbers are only used if they are posted to GL by the IC GL posting table as assigned in the SO to GL posting record (see the SO to GL Posting F/M). If inventory, sales, cost of goods and miscellaneous sales are set to post to GL by IC posting tables, the distribution prints as follows:
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Debit |
Credit |
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170-01-01 Inventory-Doc |
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115.00 |
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175-01-01 Inventory-Whs |
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23.00 |
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175-02-01 Inventory-Whs |
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18.00 |
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176-01-01 Inter-whs-COGS |
18.00 |
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176-02-01 Inter-whs-COGS |
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18.00 |
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180-01-01 Nonstocked Inventory-Doc |
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12.00 |
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410-01-01 Sales-Doc |
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160.00 |
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415-01-01 Sales-Whs |
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30.00 |
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425-01-01 Misc. Sales-Whs |
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25.00 |
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520-01-01 Cost of Goods-Doc |
127.00 |
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525-01-01 Cost of Goods-Whs |
41.00 |
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120-01-01 Accounts Receivable |
215.00 |
______ |
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401.00 |
401.00 |