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<SEC-DOCUMENT>0001140361-06-000471.txt : 20060912
<SEC-HEADER>0001140361-06-000471.hdr.sgml : 20060912
<ACCEPTANCE-DATETIME>20060110100407
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001140361-06-000471
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060110

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GSI GROUP INC
		CENTRAL INDEX KEY:			0001050925
		STANDARD INDUSTRIAL CLASSIFICATION:	FARM MACHINERY & EQUIPMENT [3523]
		IRS NUMBER:				370856587
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1004 EAST ILLINOIS ST
		CITY:			ASSUMPTION
		STATE:			IL
		ZIP:			62510
		BUSINESS PHONE:		2172264421

	MAIL ADDRESS:	
		STREET 1:		1004 EAST ILLINOIS ST
		CITY:			ASSUMPTION
		STATE:			IL
		ZIP:			62510
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
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<TEXT>
<html>
  <head>
    <title>
      GSI Group 8-K 01-09-2006
</title>
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                  9, 2006</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ms.
        Angela Crane</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Branch
        Chief</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
        Martin James</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Senior
        Assistant Chief Accountant</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ms.
        Julie
        Sherman</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Staff
        Accountant</font></div>
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        of Corporation Finance</font></div>
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        Place</font></div>
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        F
        Street, N.E.</font></div>
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        D.C. 20549</font></div>
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        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Re:</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  GSI Group, Inc.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
        10-K
        for the year ended December 31, 2004</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed
        April 15, 2005</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">File
        No.
        333-43089</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dear
        Ms.
        Crane, Mr. James and Ms. Sherman:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I
        write
        on behalf of our client, The GSI Group, Inc. (&#8220;GSI&#8221; or the &#8220;Company&#8221;) to confirm
        representations made by and on behalf of the Company during our most recent
        call
        with you, held on December 22, 2005. The following is intended to confirm
        statements made to you in our prior letters of August 11, 2005, September
        28,
        2005 and December 9, 2005.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Company
        Accounting </em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company records inventory at the lower of cost or market. To achieve market
        value for slow moving inventory, the Company records a reserve for the value
        of
        on-hand inventory deemed to be slow moving and likely to become obsolete.
        Due to
        the value of the reserve being estimated based upon the value of specific
        SKU&#8217;s
        of inventory, this method of accounting results in substantially the same
        net
        value of inventory and cost of sales as the specific write-down method
        recommended by SAB Topic 5bb. Attachment 1 illustrates this
        point.</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
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          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
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        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>COVINGTON
        &amp; BURLING</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">January
        9, 2006</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        2</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Specifically,
        Attachment 1 illustrates the results of the two inventory tracking and
        accounting methods detailed above in a hypothetical situation. The attachment
        illustrates the accounting for the sale of two types of inventory items:
        regular
        non-reserved and reserved excess. The regular inventory began at 100 units,
        30
        of which were sold, resulting in 70 units remaining at the end of the
        illustration. The excess inventory began at 10 units, which value comprised
        the
        beginning reserve, and all were sold resulting in no ending excess inventory
        quantity and no obsolete inventory reserve amount. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        balance sheet and period results achieved by utilizing the Company's accounting
        policy would be consistent with the balance sheet and period results achieved
        by
        utilizing the specific write-off method of SAB Topic 5bb, so long as the
        value
        of an underlying inventory item once reserved is removed from the reserve
        calculation if and only if the underlying inventory item is sold (in which
        case
        it would be charged to the period income statement at full cost as part of
        Cost
        of Goods Sold) or discarded (in which case it would be charged to the period
        income statement at full cost as a write off). </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Application
        of SAB Topic 5bb in Future Periods</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company acknowledges to the Staff that it is aware of and understands the
        provisions of SAB Topic 5bb. The Company also confirms that it intends to
        ensure
        its compliance with SAB Topic 5bb in future periods. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company also intends to explain in future filings the effect of sales or
        disposals of obsolete inventory on the Company&#8217;s reported Gross Margin and Net
        Income.</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
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        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>COVINGTON
        &amp; BURLING</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">January
        9, 2006</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        3</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*
        * * * *
        * * * * *</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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        Company is hopeful that this letter is helpful to the Staff, and stands ready
        to
        further discuss this issue with you at your earliest convenience. As we have
        discussed, the Company is anxious to resolve this issue so that it can seek
        acceleration of effectiveness of its pending Registration Statement on Form
        S-4,
        with respect to which penalty interest is accruing pursuant to the terms
        of the
        related Registration Rights Agreement. Please call me at (212) 841-1060 once
        you
        have had a chance to review this letter</font></div>
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      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="50%">&#160;</td>
              <td align="left" valign="top" width="50%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sincerely
                  yours,</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="50%">&#160;</td>
              <td align="left" valign="top" width="50%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="50%">&#160;</td>
              <td align="left" valign="top" width="50%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="50%">&#160;</td>
              <td align="left" valign="top" width="50%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bruce
                  C. Bennett</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">cc:</font></div>
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            </tr>

        </table>
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        Leonard Eschbach</font></div>
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      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
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        1</u></strong></font></div>
      <div><br>
        <div>
          <div align="left">
            <table border="0" cellpadding="0" cellspacing="0" width="100%">

                <tr>
                  <td colspan="21" valign="top" width="99%" style="border-bottom: black thin solid;">
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                  </td>
                </tr>
                <tr>
                  <td colspan="7" valign="top" width="34%" style="border-bottom: black thin solid;">
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                  </td>
                  <td valign="bottom" width="2%">&#160;</td>
                  <td colspan="5" valign="top" width="27%" style="border-bottom: black thin solid;">
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                  </td>
                  <td valign="bottom" width="2%">&#160;</td>
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                      Inventory</strong></font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="13%">&#160;</td>
                  <td valign="top" width="1%">&#160;</td>
                  <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Quantity
                      On Hand</font></div>
                  </td>
                  <td valign="top" width="1%">&#160;</td>
                  <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
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                      Each</font></div>
                  </td>
                  <td valign="top" width="1%">&#160;</td>
                  <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                      Cost on Hand</font></div>
                  </td>
                  <td valign="bottom" width="2%">&#160;</td>
                  <td valign="bottom" width="13%">&#160;</td>
                  <td valign="top" width="1%">&#160;</td>
                  <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Quantity</font></div>
                  </td>
                  <td valign="top" width="1%">&#160;</td>
                  <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
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                  </td>
                  <td valign="bottom" width="2%">&#160;</td>
                  <td valign="bottom" width="13%">&#160;</td>
                  <td valign="top" width="1%">&#160;</td>
                  <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Quantity
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                  </td>
                  <td valign="top" width="1%">&#160;</td>
                  <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
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                  </td>
                  <td valign="top" width="1%">&#160;</td>
                  <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
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                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="13%">&#160;</td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="top" width="6%">&#160;</td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="top" width="6%">&#160;</td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="top" width="6%">&#160;</td>
                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">&#160;</td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="top" width="6%">&#160;</td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="top" width="6%">&#160;</td>
                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">&#160;</td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="top" width="6%">&#160;</td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="top" width="6%">&#160;</td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="top" width="6%">&#160;</td>
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                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regular
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                  <td align="right" valign="bottom" width="6%">
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                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
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                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
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                  <td align="left" valign="top" width="2%">&#160;</td>
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                  <td align="right" valign="bottom" width="6%">
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                  <td align="right" valign="bottom" width="6%">
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                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
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                  </td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">70</font></div>
                  </td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
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                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
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                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="13%">
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                  </td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10</font></div>
                  </td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$30</font></div>
                  </td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
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                  </td>
                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Excess
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                  </td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10</font></div>
                  </td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$300</font></div>
                  </td>
                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Excess
                      (reserved)</font></div>
                  </td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-0-</font></div>
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                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$30</font></div>
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                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$-0-</font></div>
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                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="13%">
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                  </td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">110</font></div>
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                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$3,300</font></div>
                  </td>
                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
                  </td>
                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
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                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
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                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
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                  <td align="right" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">70</font></div>
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                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,100</font></div>
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                <tr bgcolor="white">
                  <td align="left" valign="top" width="13%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" valign="top" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" valign="top" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" valign="top" width="13%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" valign="top" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" valign="top" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" valign="top" width="13%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" valign="top" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: #ffffff solid;">&#160;</td>
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                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gross
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                  </td>
                  <td align="left" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$3,300</font></div>
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                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gross
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                  </td>
                  <td align="left" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$1,200</font></div>
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                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gross
                      Inventory</font></div>
                  </td>
                  <td align="left" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,100</font></div>
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                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reserve
                      (Cost of Excess)</font></div>
                  </td>
                  <td align="left" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-$300</font></div>
                  </td>
                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Change
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                  </td>
                  <td align="left" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-$300</font></div>
                  </td>
                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reserve
                      (Cost of Excess)</font></div>
                  </td>
                  <td align="left" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$-0-</font></div>
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                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                      Inventory On Hand</font></div>
                  </td>
                  <td align="left" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$3,000</strong></font></div>
                  </td>
                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                      Cost of Sales</font></div>
                  </td>
                  <td align="left" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$900</strong></font></div>
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                  <td align="left" valign="top" width="2%">&#160;</td>
                  <td align="left" valign="top" width="13%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                      Inventory On Hand</font></div>
                  </td>
                  <td align="left" valign="top" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">&#160;</td>
                  <td align="right" valign="bottom" width="1%">&#160;</td>
                  <td align="right" valign="bottom" width="6%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$2,100</strong></font></div>
                  </td>
                </tr>

            </table>
          </div>
        </div>
      </div>
    </div>
    <div>&#160;</div>
    <div>
      <div>
        <div align="center">
          <table cellpadding="0" cellspacing="0" width="60%">

              <tr>
                <td valign="top" width="40%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Entries:</strong></font></div>
                </td>
                <td valign="top" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td valign="top" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DR</font></div>
                </td>
                <td valign="top" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td valign="top" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CR</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
                    of Sales</font></div>
                </td>
                <td align="right" valign="top" width="1%">&#160;</td>
                <td align="right" valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$1,200</font></div>
                </td>
                <td align="right" valign="top" width="1%">&#160;</td>
                <td align="right" valign="top" width="9%">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inventory</font></div>
                </td>
                <td align="right" valign="top" width="1%">&#160;</td>
                <td align="right" valign="top" width="9%">&#160;</td>
                <td align="right" valign="top" width="1%">&#160;</td>
                <td align="right" valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$1,200</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td colspan="5" valign="top" width="60%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>To
                    record cost of items sold</em></strong></font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td colspan="5" valign="top" width="60%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">******</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td valign="top" width="40%">&#160;</td>
                <td align="right" valign="top" width="1%">&#160;</td>
                <td align="right" valign="top" width="9%">&#160;</td>
                <td align="right" valign="top" width="1%">&#160;</td>
                <td align="right" valign="top" width="9%">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reserve</font></div>
                </td>
                <td align="right" valign="top" width="1%">&#160;</td>
                <td align="right" valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$300</font></div>
                </td>
                <td align="right" valign="top" width="1%">&#160;</td>
                <td align="right" valign="top" width="9%">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
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                </td>
                <td align="right" valign="top" width="1%">&#160;</td>
                <td align="right" valign="top" width="9%">&#160;</td>
                <td align="right" valign="top" width="1%">&#160;</td>
                <td align="right" valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$300</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td colspan="5" valign="top" width="60%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>To
                    record the change in reserve</em></strong></font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td colspan="5" valign="top" width="60%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">******</font></div>
                </td>
              </tr>

          </table>
        </div>
      </div>
    </div>
    <div>&#160;</div>
    <div>
      <div>
        <hr style="COLOR: black" align="left" noshade size="2" width="100%">
      </div>
    </div>
    <div><br>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td colspan="21" valign="top" width="99%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Specific
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              </td>
            </tr>
            <tr>
              <td colspan="7" valign="top" width="34%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Beginning
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              </td>
              <td valign="bottom" width="2%">&#160;</td>
              <td colspan="5" valign="top" width="27%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Sales
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              </td>
              <td valign="bottom" width="2%">&#160;</td>
              <td colspan="7" valign="top" width="34%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Ending
                  Inventory</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="13%">&#160;</td>
              <td valign="top" width="1%">&#160;</td>
              <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Quantity
                  On Hand</font></div>
              </td>
              <td valign="top" width="1%">&#160;</td>
              <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
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              </td>
              <td valign="top" width="1%">&#160;</td>
              <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                  Cost on Hand</font></div>
              </td>
              <td valign="bottom" width="2%">&#160;</td>
              <td valign="bottom" width="13%">&#160;</td>
              <td valign="top" width="1%">&#160;</td>
              <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Quantity</font></div>
              </td>
              <td valign="top" width="1%">&#160;</td>
              <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
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              <td valign="bottom" width="13%">&#160;</td>
              <td valign="top" width="1%">&#160;</td>
              <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Quantity
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              <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
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              <td valign="bottom" width="6%" style="border-bottom: black thin solid;">
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                  Cost on Hand</font></div>
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              <td align="left" valign="top" width="13%">&#160;</td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="top" width="6%">&#160;</td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="top" width="6%">&#160;</td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="top" width="6%">&#160;</td>
              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">&#160;</td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="top" width="6%">&#160;</td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="top" width="6%">&#160;</td>
              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">&#160;</td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="top" width="6%">&#160;</td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="top" width="6%">&#160;</td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="top" width="6%">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regular
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              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">100</font></div>
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              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
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              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$3,000</font></div>
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              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regular
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              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">30</font></div>
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              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$900</font></div>
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              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regular
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              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">70</font></div>
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              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$30</font></div>
              </td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,100</font></div>
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            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="13%" style="border-bottom: #ffffff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Excess
                  (reserved)</font></div>
              </td>
              <td align="right" valign="top" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10</font></div>
              </td>
              <td align="right" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: #ffffff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$-0-</font></div>
              </td>
              <td align="right" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$-0-</font></div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="left" valign="top" width="13%" style="border-bottom: #ffffff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Excess
                  (reserved)</font></div>
              </td>
              <td align="right" valign="top" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10</font></div>
              </td>
              <td align="right" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$-0-</font></div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="left" valign="top" width="13%" style="border-bottom: #ffffff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Excess
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              </td>
              <td align="right" valign="top" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-0-</font></div>
              </td>
              <td align="right" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: #ffffff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$-0-</font></div>
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              <td align="right" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$-0-</font></div>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
              </td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">110</font></div>
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              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$3,000</font></div>
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              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
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              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">40</font></div>
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              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$900</font></div>
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              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
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              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">70</font></div>
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              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,100</font></div>
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            <tr bgcolor="white">
              <td align="left" valign="top" width="13%">&#160;</td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">&#160;</td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">&#160;</td>
              <td align="left" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gross
                  Inventory</font></div>
              </td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$3,000</font></div>
              </td>
              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gross
                  Cost of Sales</font></div>
              </td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$900</font></div>
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              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gross
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              </td>
              <td align="left" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,100</font></div>
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            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reserve
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              </td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$-0-</font></div>
              </td>
              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Change
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              </td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$-0-</font></div>
              </td>
              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reserve
                  (Cost of Excess)</font></div>
              </td>
              <td align="left" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$-0-</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                  Inventory On Hand</font></div>
              </td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$3,000</strong></font></div>
              </td>
              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                  Cost of Sales</font></div>
              </td>
              <td align="right" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$900</strong></font></div>
              </td>
              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                  Inventory On Hand</font></div>
              </td>
              <td align="left" valign="top" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">&#160;</td>
              <td align="right" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$2,100</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div align="left">&#160;</div>
    </div>
    <div align="center">
      <table cellpadding="0" cellspacing="0" width="60%">

          <tr>
            <td valign="top" width="40%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Entries:</strong></font></div>
            </td>
            <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DR</font></div>
            </td>
            <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CR</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="40%">&#160;</td>
            <td width="1%">&#160;</td>
            <td align="left" valign="top" width="9%">&#160;</td>
            <td width="1%">&#160;</td>
            <td align="left" valign="top" width="9%">&#160;</td>
          </tr>
          <tr bgcolor="#cceeff">
            <td align="left" valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
                of Sales</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$900</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inventory</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td width="1%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$900</font></div>
            </td>
          </tr>
          <tr bgcolor="#cceeff">
            <td colspan="5" valign="top" width="60%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>To
                record cost of items sold</em></strong></font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td colspan="5" valign="top" width="60%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">******</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>&#160;

      <div>
        <hr style="COLOR: black" align="left" noshade size="2" width="100%">
      </div>
    </div>
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</DOCUMENT>
</SEC-DOCUMENT>
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