Audiovox 2004 Annual Report Download - page 68

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2002, 2003 and 2004
(Dollars in thousands, except share and per share data)
A summary of the activity with respect to sales incentives is provided
below:
November 30,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
2002 2003 2004
−−−−−−−− −−−−−−−− −−−−−−−−
Opening balance $ 3,265 $ 4,626 $ 14,605
Accruals** 7,665 19,994 17,012
Payments (4,804) (8,212) (20,144)
Reversals for unearned incentives (784) (917) (2,187)
Reversals for unclaimed incentives (716) (886) (1,702)
−−−−−−−− −−−−−−−− −−−−−−−−
Ending balance $ 4,626 $ 14,605 $ 7,584
======== ======== ========
The majority of the reversals of previously established sales
incentive liabilities pertain to sales recorded in prior periods.
** Included in accruals for fiscal 2003 is $4,111 of accrued sales
incentives acquired from the acquisition of Recoton (Note 5 of Notes
to Consolidated Financial Statements).
(h) Accounts Receivable
The majority of the Company's accounts receivable are due from
companies in the retail, mass merchant and OEM industries. Credit is
extended based on an evaluation of a customer's financial condition
and, generally, collateral is not required. Accounts receivable are
generally due within 30−60 days and are stated at amounts due from
customers, net of an allowance for doubtful accounts. Accounts
outstanding longer than the contracted payment terms are considered
past due.
Accounts receivable is comprised of the following:
November 30,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
2003 2004
−−−−−−−− −−−−−−−−
Trade accounts receivable and other $148,096 $126,738
Less:
Allowance for doubtful accounts 5,558 6,271
Allowance for cash discounts 677 503
−−−−−−−− −−−−−−−−
$141,861 $119,964
======== ========
The Company performs ongoing credit evaluations of its customers and
adjusts credit limits based upon payment history and the customer's
current credit worthiness, as determined by a review of their current
credit information. The Company continuously monitors collections and
payments from its customers and maintains a provision for estimated
credit losses based upon historical experience and any specific
customer collection issues that have been identified. While such
credit losses have historically been within management's expectations
and the provisions established, the Company cannot guarantee that it
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