Bicycle Mechanics - RD issue

I bought a new bike in Colorado, did some riding there. They boxed up the bike and sent it to me, no adjustments were made beforehand. I installed all the parts, but am having an issue with the RD. It simply will not shift to the smallest cog. When I install it the chain automatically skips up two cogs.

Nothing is bent, is this something that the barrel adjuster should be used to correct or the H/L limit screws?

It likely is an issue with both cable-tension and the Hi-Lo setting-screws. Best bet is to release the cable at the pinch-bolt on the RD and follow installation instructions here:

http://www.parktool.com/repair/readhowto.asp?id=64

And here:

http://bicycletutor.com/adjust-rear-derailleur/

Essentially what you should watch for is using the right amount of torque initially to hold the cable. You want to pull it taut - NOT tight - when you first install the cable. And then understand that a new cable will "stretch" with a little time after installation. The 'B-adjustment' screw acts as a barrel-adjuster to increase the tension of the cable on the RD. This should be able to deal with this 'settling' of the cable during the first 10 to 20 miles. Cable gets loose? RD makes noise and doesn't shift like is was a mile ago? Tighten it with the B-Adjustment.

In many cases, one will have to release the cable and adjust it from scratch. Re-adjust the RD set-screws. And do it over. Usual torque for the pinch bolt is 48 - 60 inch-pounds. Get this right, then the 'B' screw should handle it.

What truly needs to be done is to take a deep breath, and be patient as you work on the problem. It gets easier everytime. :thumb:

If the bike was shipped, then don't assume that nothing was bent. The rear derailleur hanger is very easy to bend and it's not obvious (unless it's really bent). If you don't have a hanger alignment tool, take it to the bike shop and they can fix it in <5 min.