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adoption of this ASU resulted in no change to our results of operations or balance sheet. Retail |
and Appliances Segment We |
collect 100% of the payment for special-order models including tax and 50% of the payment for non-special orders from the customer at |
the time the order is placed. We do not incur incremental costs obtaining purchase orders from customers, however, if we did, because |
all contracts are less than a year in duration, any contract costs incurred would be expensed rather than capitalized. Performance |
Obligations – The revenue that we recognize arises from orders we receive from customers. Our performance obligations under the |
customer orders correspond to each sale of merchandise that we make to customers under the purchase orders; as a result, each purchase |
order generally contains only one performance obligation based on the merchandise sale to be completed. Control of the delivery transfers |
to customers when the customer can direct the use of, and obtain substantially all the benefits from, our products, which generally occurs |
when the customer assumes the risk of loss. The transfer of control generally occurs at the point of pickup, shipment, or installation. |
Once this occurs, we have satisfied our performance obligation and we recognize revenue. Transaction |
Price ‒ We agree with customers on the selling price of each transaction. This transaction price is generally based on the agreed |
upon sales price. In our contracts with customers, we allocate the entire transaction price to the sales price, which is the basis for |
the determination of the relative standalone selling price allocated to each performance obligation. Any sales tax that we collect concurrently |
with revenue-producing activities are excluded from revenue. Cost |
of revenue includes the cost of purchased merchandise plus freight and any applicable delivery charges from the vendor to us. Substantially |
all sales are to individual retail consumers (homeowners), builders and designers. The large majority of customers are homeowners and |
their contractors, with the homeowner being key in the final decisions. We have a diverse customer base with no one client accounting |
for more than 5% of total revenue. 90 Customer |
deposits ‒ We record customer deposits when payments are received in advance of the delivery of the merchandise. We expect that |
substantially all of the customer deposits will be recognized within six months as the performance obligations are satisfied. Construction |
Segment Our |
construction segment revenues are derived primarily through contracts with customers whereby we specialize in all aspects of products |
and services relating to finished carpentry, custom cabinetry, and countertops. We recognize revenue when control of the promised goods |
or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those |
goods or services. We account for a contract when we have approval and commitment from both parties, the rights of the parties are identified, |
payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. A |
contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance |
obligation is satisfied. Since most contracts are bundled to include both material and installation services, we combine these items |
into one performance obligation as the overall promise to transfer the individual goods or services is not separately identifiable from |
other promises in the contract and, therefore, is not distinct. We do offer assurance-type warranties on certain of its installed products |
and services that do not represent a separate performance obligation and, as such, do not impact the timing or extent of revenue recognition. For |
any contracts that are not complete at the reporting date, we recognize revenue over time, because of the continuous transfer of control |
to the customer as work is performed at the customer’s site and, therefore, the customer controls the asset as it is being installed. |
We utilize the cost-to-cost measure of progress method as we believe this best depicts the transfer of control of assets to the customer, |
which occurs as costs are incurred. When this method is used, we estimate the costs to complete individual contracts and record as revenue |
that portion of the total contract price that is considered complete based on the relationship of costs incurred to date to total anticipated |
costs. Unforeseen events and circumstances can alter the estimate of the costs associated with a particular contract. Total estimated |
costs at completion can be impacted by changes in productivity, scheduling, cost of labor, and materials. Additionally, external factors |
such as weather, and customer delays may affect the progress of a project’s completion, and thus the timing and amount of revenue |
recognition, cash flow, and profitability from a particular contract may be adversely affected. An |
insignificant portion of sales, primarily retail sales, is accounted for on a point-in-time basis when the sale occurs. Sales taxes, |
when incurred, are recorded as a liability and excluded from revenue on a net basis. Contracts |
can be subject to modification to account for changes in contract specifications and requirements. We consider contract modifications |
to exist when the modification either creates new, or changes the existing, enforceable rights and obligations. Most contract modifications |
are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the |
context of the contract and are accounted for as if they were part of that existing contract. The effect of a contract modification on |
the transaction price and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment |
to revenue on a cumulative catch-up basis. All |
contracts are billed either contractually or as work is performed. Billing on long-term contracts occurs primarily on a monthly basis |
throughout the contract period whereby we submit progress invoices for customer payment based on actual or estimated costs incurred during |
the billing period. On some contracts, the customer may withhold payment on an invoice equal to a percentage of the invoice amount, which |
will be subsequently paid after satisfactory completion of each project. This amount is referred to as retainage and is common practice |
in the construction industry, as it allows for customers to ensure the quality of the service performed prior to full payment. The retention |
provisions are not considered a significant financing component. Cost |
of revenues earned include all direct material and labor costs and those indirect costs related to contract performance. The cost of |
significant uninstalled materials, re-work, or scrap is generally excluded from the cost-to-cost measure of progress as it is not proportionate |
to the entity’s progress in satisfying the performance obligation. Contract |
Assets and Contract Liabilities We |
record a contract asset when we have satisfied our performance obligation prior to billing and a contract liability when a customer payment |
is received prior to the satisfaction of our performance obligation. The difference between the beginning and ending balances of contract |
assets and liabilities primarily results from the timing of our performance and the customer’s payment. At times, we have a right |
to payment from previous performance that is conditional on something other than passage of time, such as retainage, which is included |
in contract assets or contract liabilities, as determined on a contract-by-contract basis. 91 Automotive |
Supplies Segment Our |
automotive supplies segment designs and sells horn and safety products (electric, air, truck, marine, motorcycle and industrial equipment), |
and offers vehicle emergency and safety warning lights for cars, trucks, industrial equipment and emergency vehicles. Focused on the |
automotive and industrial after-market, we sell our products to big-box national retail chains, through specialty and industrial distributors, |
as well as online/mail order retailers and original equipment manufacturers. We |
collect 100% of the payment for internet and phone orders, including tax, from the customer at the time the order is shipped. Customers |
placing orders with a purchase order through the EDI (Electronic Data Interface) are allowed to purchase on credit and make payment after |
receipt of product on the agreed upon terms. Performance |
Obligations – The revenue that we recognize arises from orders we receive from contracts with customers. Our performance obligations |
under the customer orders correspond to each sale of merchandise that we make to customers and each order generally contains only one |
performance obligation based on the merchandise sale to be completed. Control of the delivery transfers to customers when the customer |
can direct the use of, and obtain substantially all the benefits from, our products, which generally occurs when the customer assumes |
the risk of loss. The transfer of control generally occurs at the point of shipment of the order. Once this occurs, we have satisfied |
our performance obligation and we recognize revenue. Transaction |
Price ‒ We agree with customers on the selling price of each transaction. This transaction price is generally based on the agreed |
upon sales price. In our contracts with customers, we allocate the entire transaction price to the sales price, which is the basis for |
the determination of the relative standalone selling price allocated to each performance obligation. Any sales tax that we collect concurrently |
with revenue-producing activities are excluded from revenue. Cost |
of sales includes the cost of purchased merchandise plus freight, warehouse salaries, tariffs, and any applicable delivery charges from |
the vendor to us. Warranties |
vary and are typically 90 days to consumers and manufacturing defect warranty to are available to resellers. At times, depending on the |
product, we can also offer a warranty up to 12 months. Receivables Receivables |
consist of trade accounts receivable from customer, credit card transactions in the process of settlement, and vendor rebates receivable. |
Vendor rebates receivable represent amounts due from manufactures from whom we purchase products. Rebates receivables are stated at the |
amount that management expects to collect from manufacturers, net of accounts payable amounts due the vendor. Rebates are calculated |
on product and model sales programs from specific vendors. The rebates are paid at intermittent periods either in cash or through issuance |
of vendor credit memos, which can be applied against vendor accounts payable. Based on our assessment of the credit history with manufacturers, |
we have concluded that there should be no allowance for uncollectible accounts. We historically collect substantially all of our outstanding |
rebates receivable. Retainage receivables represent the amount retained by customers to ensure the quality of the installation and is |
received after satisfactory completion of each installation project. Management regularly reviews aging of retainage receivables and |
changes in payment trends and records an allowance when collection of amounts due are considered at risk. The allowance for doubtful |
accounts amounted to $359,000 and $0 for the years ended December 31, 2021 and 2020, respectively. Uncollectible balances are expensed |
in the periods they are determined to be uncollectible. Inventory For |
Asien’s, inventory mainly consists of appliances that are acquired for resale and is valued at the average cost determined on a |
specific item basis. Inventory also consists of parts that are used in service and repairs and may or may not be charged to the customer |
depending on warranty and contractual relationship. Kyle’s typically orders inventory on a job-by-job basis and those jobs are |
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