Summary of Significant Accounting Policies (Policies)
|12 Months Ended
Oct. 31, 2012
|Accounting Policies [Abstract]
|Use of Estimates
preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying
notes. Significant items subject to such estimates and assumptions include allowances for doubtful accounts, valuation of deferred
tax assets, valuation of inventory, and estimates for warranty claims. Actual results could differ from those estimates.
|Cash and Cash Equivalents
and Cash Equivalents
purposes of the statements of cash flows, cash and cash equivalents include cash on hand, bank demand accounts and money market
accounts having original maturities of less than three months.
|Accounts Receivable and Allowance for Doubtful Accounts
Receivable and Allowance for Doubtful Accounts
accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful
accounts for estimated losses inherent in its accounts receivable. The Company reviews its allowance for doubtful accounts monthly
including the analysis of historical trends, customer credit worthiness and the aging of receivables. In addition, past due balances
are reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection
have been exhausted and the potential for recovery is considered remote.
are stated at the lower of cost or market. Cost is determined by a method that approximates the first-in, first-out method. Work
in process and finished goods are valued based on underlying costs to manufacture balers which include direct materials, direct
and indirect labor, and overhead. The Company reviews inventory for obsolescence on a regular basis.
|Property, Plant, and Equipment
Plant, and Equipment
plant and equipment are stated at cost net of accumulated depreciation. The cost of property, plant, and equipment is depreciated
over the estimated useful lives of the related assets. Depreciation is computed primarily using the straight-line method over
the estimated lives of 5-20 years for machinery and equipment and 31-40 years for buildings.
Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount
of an asset to estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of an asset
exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the
asset exceeds the fair value of the asset. Assets to be disposed of by sale are reported at the lower of the carrying amount or
fair value less costs to sell, and depreciation ceases.
taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized
income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition
or measurement are reflected in the period in which the change in judgement occurs.
Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative
Company recognizes revenue when finished products and/or parts are shipped and the customer takes ownership and assumes the risk
of loss. Revenue from installation services is recognized on completion of the service. The Company recognizes revenue from repair
services in the period in which the service is provided.
|Warranties and Service
Company typically warrants its products for one (1) year from the date of sale as to materials and six (6) months as to labor,
and offers services for other required repairs and maintenance. Service is rendered by repairing or replacing parts at the Companys
Jacksonville, Florida, facility, by on-site service provided by Company personnel who are based in Jacksonville, Florida, or by
local service agents who are engaged as needed. The Company maintains an accrued liability for expected warranty claims. The warranty
accrual is based on historical warranty costs, the quantity and type of balers currently under warranty, and known warranty issues.
is a tabular reconciliation of the changes in the warranty accrual for the for the years ended October 31, 2012 and
|| ||2012|| ||
|| ||2011|| |
|Warranty service provided||
|New product warranties||
|| ||238,654|| ||
|| ||139,782|| |
|Changes to pre-existing warranty accruals||
|| ||15,936|| ||
|| ||26,673|| |
|Earnings Per Share
earnings per share is calculated using the weighted average number of common shares outstanding during each year. Diluted earnings
per share includes the net number of shares that would be issued upon the exercise of stock options using the treasury stock method.
Options are not considered in loss years as they would be anti-dilutive. The dilutive impact of options outstanding was -0- shares
and 59,969 shares for the years ended October 31, 2012 and 2011, respectively.
Company recognizes all stock-based compensation as an expense in the financial statements measured at the fair value of the award
at the grant date. In June 2002, the Company granted 250,000 nonqualified stock options to purchase shares of the Companys
common stock. These options, which vested immediately, have an exercise price of $0.30 and a term of 10 years. The Company has
no remaining authorized shares available for grant under existing stock option plans. As of October 31, 2012, the Company has
no options outstanding to grant under previously authorized plans and no options were issued during the years ended October 31,
2012 or 2011. As all options were fully vested, there was no impact on net income for the years ended October 31, 2012 and 2011.
The stock options issued in 2002 were exercised in April, 2011 and 250,000 shares of common stock were issued.
|Business Reporting Segments
Company operates in one segment based on the information monitored by the Companys operating decision makers to manage
|Fair Value of Financial Instruments
Value of Financial Instruments
carrying amounts of the Companys financial instruments, including cash and cash equivalents, accounts receivable, accounts
payable, accrued liabilities, and customer deposits, approximate their fair value due to the short-term nature of these assets
and liabilities. The carrying amount of deferred compensation approximates fair value, based on current rates available to the
Company for loans with similar maturities.