Lifetime Fitness 2006 Annual Report Download - page 48

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LIFE TIME FITNESS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
42
The rollforward of these allowances are as follows:
December 31,
2006 2005 2004
Allowance for Doubtful Accounts:
Balance, beginning of period................................................................................. $ 187 $ 435 $ 541
Provisions.............................................................................................................. 542 126 108
Write-offs against allowance................................................................................. (113) (374) (214)
Balance, end of period........................................................................................... $ 616 $ 187 $ 435
Sales Returns and Allowances:
Balance, beginning of period................................................................................. $134 $ 289 $ 136
Provisions.............................................................................................................. (52) 255 563
Write-offs against allowance................................................................................. (82) (410) (410)
Balance, end of period........................................................................................... $ – $ 134 $ 289
Inventories — Inventories consist primarily of operational supplies, nutritional products and uniforms. These
inventories are stated at the lower of cost or market value.
Prepaid Expenses and Other Current Assets — Prepaid expenses and other current assets consist primarily of
prepaid insurance, other prepaid operating expenses and deposits.
Property and Equipment — Property, equipment and leasehold improvements are recorded at cost. Improvements
are capitalized, while repair and maintenance costs are charged to operations when incurred. The cost and
accumulated depreciation of property and equipment retired and other items disposed of are removed from the
related accounts, and any residual values are charged or credited to income.
Depreciation is computed primarily using the straight-line method over estimated useful lives of the assets.
Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the
estimated useful life of the improvement. Accelerated depreciation methods are used for tax reporting purposes.