Note 4 - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2012

Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

4.  VALUATION AND QUALIFYING ACCOUNTS

· Allowance for uncollectible accounts

We maintain allowances for bad debts based on factors such as the composition of accounts receivable, the age of the accounts, historical bad debt experience, and our evaluation of the financial condition and past collection history of each customer.  Accounts are written off as they are deemed uncollectible based on a periodic review of accounts.  Our allowance for doubtful accounts was $112,000 and $81,000, respectively, at December 31, 2012 and 2011.  The following is a roll forward of the allowance for doubtful accounts:

Year ended:	Balance at beginning of  year		Reserve "purchased" during year		Additions (reductions) charged to costs and expenses			Foreign exchange gain/loss		Write-offs			Balance  at end of year
December 31, 2012	$	80,926		-		77,143			242		(46,315	)	$	111,996
December 31, 2011	$	146,929		-		(45,315	)		156		(20,844	)	$	80,926
December 31, 2010	$	136,023		-		25,348			595		(15,037	)	$	146,929

· Sales returns and defective merchandise

Product returns are generally recorded directly against sales as those returns occur.  Historically, the amount of returns is immaterial and as a result, no reserve is recorded in the financial statements.

· Slow-moving and obsolete inventory

The majority of inventory items maintained by us have no restrictive shelf life.  We review all inventory items annually to determine what items should be eliminated from the product line.  Items are selected for several reasons:  (1) they are slow-moving; (2) the supplier is unable to provide an acceptable quality or quantity; or (3) to maintain a freshness in the product line.  Once an item has been selected to discontinue, we devalue the cost of the item by 25% of its original value each quarter until its value has been reduced to zero.  Reductions in inventory for slow-moving and obsolete inventory are recorded directly against inventory.