LeapFrog 2003 Annual Report Download - page 68
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Appendix A
Schedule II - 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, 2001 ...................... $11,424 $16,008(a) $17,578(b) $ 9,854
Year ended December 31, 2002 ...................... 9,854 24,043(c) 17,509 16,388
Year ended December 31, 2003 ...................... 16,388 40,165(d) 29,573 26,980
Allowance for inventory ............................
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
Year ended December 31, 2003 ...................... 5,352 41(g) 2,096 3,297
(a) 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.
(b) 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.
(c) Increase in expense charged to operations in 2002 due primarily to the increase in sales, and related returns
from retailers, for 2002.
(d) Increase in expense charged to operations in 2003 due primarily to the ratable increase in sales and higher
promotional allowances given to major retailers for in-store promotions.
(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versions of our globe and Internet connectivity products, which have been replaced by our new globe and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.
(g) Decrease in obsolescence, slow-moving and excess inventory provision charged to operations in 2003 was
primarily due to the fact that we did not have any discontinued products in 2003 and that reserves are
adequate to cover all anticipated inventory risks.
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