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Advances on Contracts
12 Months Ended
Dec. 31, 2013
Advances on Contracts

NOTE E — ADVANCES ON CONTRACTS

Milestone has entered into fixed arrangements with a contract manufacturer to manufacture STA, CompuDent and Wand Plus. The contract manufacturer bills Milestone as the work progresses and it is Milestone’s policy is to record these billings as advances on contracts. These advances are reclassified into inventory when the contract manufacturer ships the product and title passes to Milestone. The balance of the advances as of December 31, 2013 and 2012 totaled $2,308,352 and $2,827,446, respectively. The advance is classified as current based on the estimated annual usage of the underlying inventory. Milestone also has an outstanding accounts payable of approximately $37,000 and $705,000 at December 31, 2013 and 2012, respectively to the contract manufacturer related to the progress billings received. Milestone charged to operations approximately $60,000 of STA parts that had expired shelf life and $135,000 of parts for the CompuDent and Wand Plus at December 31, 2012, due to the high cost of producing additional instruments.