Quarterly report pursuant to Section 13 or 15(d)

PRODUCT RETURNS AND ALLOWANCES

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PRODUCT RETURNS AND ALLOWANCES
 6 Months Ended
Jun. 30, 2016
Notes to Financial Statements  
PRODUCT RETURNS AND ALLOWANCES

NOTE 4 – PRODUCT RETURNS AND ALLOWANCES

 

The Company recorded an allowance for estimated customer returns of $305,663 and $609,770 for the six months ended June 30, 2016 and the year ended December 31, 2015. The allowance was based on multiple criteria, including type of store, history of returns, length of time since product was sold to the customer and inventory remaining with customer (if known). Use of these criteria resulted in different percentages being applied to different customers. The allowance will be evaluated and adjusted accordingly on a quarterly basis

 

December 31, 2015   Amount to apply reserve against   Reserve %   Reserve
Pending return   $ N/A       N/A     $ 362,719  
Customer type 1     395,353       20 %     79,071  
Customer type 2     163,434       20 %     32,687  
Customer type 3     343,620       35 %     120,267  
Customer type 4     150,262       10 %     15,026  
    $ 1,052,669             $ 609,770  

 

June 30, 2016   Amount to apply reserve against   Reserve %   Reserve   Recognized in 2016   Reserve 6/30/2016
Pending return   $ N/A       N/A     $ 140,962       —         140,962  
Customer type 1     395,353       20 %     79,071       (26,356 )     52,715  
Customer type 2     163,434       20 %     32,687       (10,896 )     21,791  
Customer type 3     343,620       35 %     120,267       (40,089 )     80,178  
Customer type 4     150,262       10 %     15,026       (5,009 )     10,017  
    $ 1,052,669             $ 388,013       (82,350 )     305,663