10. Other Balance Sheet Information

The following is a summary of accounts receivable at December 31, 2017 and September 30, 2017 (in thousands):


	December 31,		September 30,
	2017		2017
Accounts receivable	$	140,490	$	122,868
Less allowance for doubtful accounts		(1,384)		(1,959)
Less allowance for sales returns		(59)		(81)
Accounts receivable, net	$	139,047	$	120,828

The following is a summary of inventories at December 31, 2017 and September 30, 2017 (in thousands):


	December 31,		September 30,
	2017		2017
Inventories
Raw materials and purchased parts	$	76,389	$	73,819
Work-in-process		11,729		10,548
Finished goods		26,915		22,028
Total inventories	$	115,033	$	106,395

Reserves for excess and obsolete inventory were $22.9 million and $23.5 million, respectively, at December 31, 2017 and September 30, 2017.

During the three months ended December 31, 2017 and the fiscal year ended September 30, 2017, the Company had cumulative capitalized direct costs of $5.0 million and $4.7 million, respectively, associated with the development of software for its internal use which are included within "Property, plant and equipment, net" in the accompanying unaudited Consolidated Balance Sheets. During the three months ended December 31, 2017, the Company capitalized direct costs of $0.3 million associated with development of software for its internal use.

The Company establishes reserves for estimated costs of product warranties based on historical information. Product warranty reserves are recorded at the time product revenue is recognized, and retrofit accruals are recorded at the time retrofit programs are established. The Company’s warranty obligation is affected by product failure rates, utilization levels, material usage, service delivery costs incurred in correcting a product failure and supplier warranties on parts delivered to the Company.

The following is a summary of product warranty and retrofit activity on a gross basis for the three months ended December 31, 2017 and 2016 (in thousands):


Activity -Three Months Ended December 31, 2017
Balance						Balance
September 30,						December 31,
2017		Accruals		Costs Incurred		2017
$	8,054	$	2,336	$	(2,172)	$	8,218


Activity -Three Months Ended December 31, 2016
Balance						Balance
September 30,						December 31,
2016		Accruals		Costs Incurred		2016
$	6,324	$	2,507	$	(2,614)	$	6,217