4. ACCOUNTS RECEIVABLE, NET

12 Months Ended

Dec. 31, 2014

Accounts Receivable Net

4. ACCOUNTS RECEIVABLE, NET

The following table sets forth the components of accounts receivable:

	December 31,			December 31,
	2014			2013
Accounts receivable, gross	$	4,353,048		$	112,921
Allowance for doubtful accounts, sales returns, and discounts		(261,674	)		-
Accounts receivable, net	$	4,091,374		$	112,921

Accounts receivable are primarily from retail and wholesale customers or third-party internet brokers. Management reviews accounts receivable on a monthly basis to determine if any receivables are potentially uncollectible. An allowance for doubtful accounts, sales returns, and discounts is determined based on a combination of historical experience, length of time outstanding, customer credit worthiness, and current economic trends. Bad debt expense of approximately $2,093,000 was recorded in 2014. As of December 31, 2013, the Company expected the amount of any potentially uncollectible receivables to be insignificant; therefore, no allowance for doubtful accounts had been determined necessary by management at that date or for the year then ended.