Accrued Product Warranty Costs

6 Months Ended

Dec. 31, 2011

Accrued Product Warranty Costs [Abstract]

NOTE 5 – ACCRUED PRODUCT WARRANTY COSTS

The Company provides a warranty for all of its consumable supply products. The Company's warranty stipulates that it will pay reasonable and customary charges for the repair of a printer needing service as a result of using the Company's products. The Company estimates the costs that may be incurred and records a liability in the amount of such costs at the time product revenue is recognized. Factors that may affect the warranty liability and expense include the number of units shipped to customers, historical and anticipated rates of warranty claims and cost per claim. The Company periodically assesses the adequacy of the recorded warranty liability and adjusts the amount as necessary. The Company continues to warrant its products sold prior to discontinuing its operations (see Note 1) and did not sell the liability with respect to those operations. This liability relates exclusively to operations which have been discontinued and the liability is included in liabilities of discontinued operations on the accompanying condensed consolidated balance sheets.

Changes in accrued product warranty costs for the three and six months ended December 31, 2011 and 2010 were as follows:


		Three Months Ended						Six Months Ended
		December 31,						December 31
		2011			2010			2011			2010
Accrued product warranty costs
at the beginning of the period	$	110,827		$	365,548		$	133,814		$	432,548

Warranties accrued during the period		–			146,767			–			409,951
Warranties settled during the period		(1,860	)		(226,767	)		(24,847	)		(556,951	)
Net change in accrued warranty costs		(1,860	)		(80,000	)		(24,847	)		(147,000	)

Accrued product warranty costs
at the end of the period	$	108,967		$	285,548		$	108,967		$	285,548

MEDIA SCIENCES INTERNATIONAL INC 10-Q