Set up inventory items

Background:

Currently E Bike City sells one type of electric bike- E Bike 100. However, the business has decided to add one more electric bike (the Electric Dream 250 bike) to their inventory. Not only that, during the last few years, they have also noticed that there is an increasing interest from regular customers for electric scooters. Therefore, Erica has also decided to add a Glide Electric Scooter to their range of inventory. Erica sees this as an effective way to increase her customer base and sales. E Bike City keeps a continual track of inventory balances (i.e., a perpetual inventory system). The purchase price and selling price are fixed for the foreseeable future. The information below provides the details of the two new inventory items:

Item 1

Item code- ED Description- Electric Dream 250 Bike Cost Price (Excluding GST) - $1,400 Sale Price (Excluding GST) - $2,000

Item 2

Item code- GES Description- Glide Scooter Cost Price (Excluding GST) - $1000 Sale Price (Excluding GST) - $1,500

Required: Using the information provided above, set up the two new inventory items in the Xero

accounting software.

Hint:

When adding each inventory item, note that these items are purchased for the purpose of reselling to customers. Note also that the business uses a perpetual inventory system.

When you complete the required fields under I purchase this item, select the purchase account as the Cost of Goods Sold ledger account. By doing so, when the business sells this inventory item, the system knows which account to record the cost of the sales of the item in. Similarly, after tick Track inventory item, select 630- Inventory to record the purchase of the inventory as an asset.