4. DISTRIBUTION AGREEMENT RECEIVABLE AND DEFERRED REVENUE

6 Months Ended

Jun. 30, 2013

Deferred Revenue Disclosure [Abstract]

4. DISTRIBUTION AGREEMENT RECEIVABLE AND DEFERRED REVENUE

Effective September 1, 2011, the Company entered into an agreement with Young’s Market Company for distribution of Company-produced wines in Oregon and Washington.   The terms of this contract include exclusive rights to distribute Willamette Valley Vineyard’s wines in Oregon and Washington for seven years.  In an effort to facilitate the transition with as little disruption as possible, Young’s Market Company has agreed to compensate Willamette Valley Vineyards for ongoing Oregon sales and branding efforts.  As a result, the Company is due to receive $250,000 per year starting on September 2011 for each of the next four years for a total of $1,000,000. As of June 30, 2013 and December 31, 2012, the remaining amount to be collected was $500,000.  The total amount of $1,000,000 to be received by the Company related to this agreement is being recognized as revenue on a straight line basis over the seven year life of the agreement. For the three months ended June 30, 2013 and 2012, the Company has recognized revenue related to this agreement in the amount of $35,715 and $35,715, respectively, recorded to other income.  For the six months ended June 30, 2013 and 2012, the Company has recognized revenue related to this agreement in the amount of $71,430 and $71,430, respectively, recorded to other income.