General form of registration statement for all companies including face-amount certificate companies

Product warranty

Product warranty

12 Months Ended

Dec. 31, 2012

Note 9 — Product warranty

The Company reserves an estimate of its exposure to warranty claims based on both current and historical product sales data and warranty costs incurred. The majority of the Company’s products carry a one-year warranty. The Company assesses the adequacy of its recorded warranty liability annually and adjusts the amount as necessary. The warranty liability is included in accrued expenses on the accompanying consolidated balance sheets.

Changes in the Company’s warranty reserve were as follows:

Warranty reserve, December 31, 2010	$	82,600
Warranty provision for units sold		42,847
Costs of warranty incurred		(72,447)
Warranty reserve, December 31, 2010	$	53,000
Warranty provision for units sold		76,637
Costs of warranty incurred		(72,637)
Warranty reserve, December 31, 2011		57,000
Warranty provision for units sold		160,684
Costs of warranty incurred		(127,484)
Warranty reserve, December 31, 2012	$	90,200