LeapFrog 2002 Annual Report Download - page 69

Download and view the complete annual report

Please find page 69 of the 2002 LeapFrog annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

Appendix A
Valuation and Qualifying Accounts and Allowances
(In thousands)
Balance at
Beginning
of Year
Additions
Charged to
Operations Net Deductions
Balance at
End of Year
Allowances for accounts receivable
Year ended December 31, 2000 ........................ $ 2,906 $12,187(a) $ 3,669 $11,424
Year ended December 31, 2001 ........................ 11,424 16,008(b) 17,578(c) 9,854
Year ended December 31, 2002 ........................ 9,854 24,043(d) 17,509 16,388
Allowance for inventory
Year ended December 31, 2000 ........................ $ 1,568 $ 1,763 $ 375 $ 2,956
Year ended December 31, 2001 ........................ 2,956 5,359(e) 1,969(f) 6,346
Year ended December 31, 2002 ........................ 6,346 2,005 2,999 5,352
(a) Increase in bad debt expense charged to operations in 2000 is due to the increase in sales for 2000, as well
as related returns from retailers.
(b) Increase in bad debt expense charged to operations in 2001 is due to the bankruptcy filing of Kmart, which
led to $6,400 in bad debt expense, as well as increased sales and related returns.
(c) Includes the write-off of $6,400 in accounts receivable from Kmart considered to be uncollectible, as well
as other write-offs taken in the ordinary course of business.
(d) Increase in expense charged to operations in 2002 due primarily to the increase in sales, and related
returns from retailers, for 2002.
(e) Increase in obsolescence, slow-moving and excess inventory provision charged to operations in 2001 is
due to discontinued and slow-moving products. Our primary discontinued products included the previous
versions of our globe and Internet connectivity products, which have been replaced by our new globe and
Mind Station products, respectively. The total reserve taken for these two items was $2,824. The
remaining provision was primarily for excess and slow-moving inventory. The estimates of the reserve
necessary for excess and obsolete inventory is based on a review of inventories on hand compared to their
estimated future usage and demand for products.
(f) Increase in deductions in 2001 were primarily related to the write down of inventory in connection with
obsolete product lines.