v2.3.0.11
Product Warranties
 6 Months Ended
Jun. 30, 2011
Product Warranties  
Product Warranties

NOTE 6 – PRODUCT WARRANTIES

The Company provides the retail home buyer a one-year limited warranty covering defects in material or workmanship in home structure, plumbing and electrical systems. The Company estimated warranty costs are accrued at the time of the sale to the dealer following industry standards and historical warranty cost incurred. Periodic adjustments to the estimated warranty accrual are made as events occur which indicate changes are necessary. As of June 30, 2011, the Company has recorded an accrued liability of $1,245,000 for estimated warranty costs relating to homes sold, based upon management's assessment of historical experience factors and current industry trends. Management reviews its warranty requirements at the close of each reporting period and adjusts the reserves accordingly.

The following tabular presentation reflects activity in warranty reserves during the periods presented:

 

     For The Three Month Period Ended     For The Six Month Period Ended  
     June 30,     June 30,     June 30,     June 30,  
     2011     2010     2011     2010  

Balance at beginning of period

    $ 1,165,000      $ 1,420,000      $ 1,290,000      $ 1,530,000   

Warranty charges

      557,344        607,711        885,305        1,180,908   

Warranty payments

      (477,344 )      (532,711 )      (930,305 )      (1,215,908 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Balance at end of period

    $ 1,245,000      $ 1,495,000      $ 1,245,000      $ 1,495,000