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Note 5 - Accounts Receivable and Net Sales
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9 Months Ended |
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Jun. 30, 2014
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Note 5. Accounts Receivable and Net Sales
Credit is extended based on the evaluation of a customer’s financial condition and collateral is generally not required. Accounts that are outstanding longer than the contractual payment terms are considered past due. The Company writes off accounts receivable when they become uncollectible; payments subsequently received on such receivables are credited to the allowance for doubtful accounts. As of both June 30, 2014 and September 30, 2013, the balance in the allowance for doubtful accounts was $97,950.
The Company has rebate arrangements with customers that expire at various times and as of June 30, 2014 has accrued rebates of $2,600,190 related to these agreements. These agreements have a right of offset against accounts receivable balances for these customers, and after offsetting, the Company has recorded an accrued rebate liability of $2,560,998 as of June 30, 2014. All amounts related to these rebate agreements are recorded as an adjustment to sales and were $(176,449) and $1,208,830 for the three and nine months ended June 30, 2014, respectively, and $152,564 and $582,216 for the three and nine months ended June 30, 2013, respectively.
See Note 7, “Major Customer Concentration” for further information regarding accounts receivable and net sales.
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