RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

REVENUE RECOGNITION — In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09 (Topic 606), Revenue from Contracts with Customers. This new standard supersedes nearly all existing revenue recognition guidance and provides a five-step analysis to determine when and how revenue is recognized. The underlying principle is to recognize revenue when promised goods or services transfer to the customer. The amount of revenue recognized will reflect the consideration expected to be received for those goods or services. The new standard also requires additional disclosures about the nature, amount, timing and uncertainty of revenues and cash flows arising from customer contracts. The standard permits the use of either the full or modified retrospective transition method. The Company adopted the new standard effective July 1, 2018, using the full retrospective method.

Adoption of the new revenue recognition standard required the Company to restate its previously reported results for the prior year comparative period and had a material impact on the consolidated balance sheets but an overall immaterial impact on its consolidated statements of income and cash flows and related disclosures. The impact on the Company's consolidated balance sheets was a result of the adjustment to defer revenue from prior years and a corresponding adjustment to retained earnings.

LEASES — In February 2016, the FASB issued ASU 2016-02 (Topic 842), Leases. This new standard revises existing lease guidance and requires all operating leases to be recorded on a company's balance sheet as right-of-use assets and lease liabilities. The new guidance also requires additional disclosures about leases. The Company elected to early adopt the standard effective July 1, 2018, concurrent with the adoption of the new standard related to revenue recognition.

The adoption of the new lease standard had a material impact on the consolidated balance sheets but did not have an impact on the consolidated statements of operations. The impact on the Company's consolidated balance sheets was a result of recording the right-of-use asset and corresponding lease liability. Adoption of the new standard also required the Company to restate its previously reported results to include the recognition of right-of-use assets and lease liabilities for the prior year comparative period.

IMPACTS TO PREVIOUSLY REPORTED RESULTS — Adoption of the standard related to revenue recognition impacted the Company's previously reported results as follows:



			New
	As		Revenue
Balance Sheets	Previously		Standard			As
June 30, 2018	Reported		Adjustment			Restated
Current liabilities:
Accrued liabilities	$	1,178,571	$	(389,610	)	$	788,961
Deferred revenue	—		690,905			690,905

Long-term liabilities:
Other liabilities	155,702		(155,702		)	—
Deferred revenue	—		168,465			168,465

Equity:
Retained earnings	8,728,628		(314,058		)	8,414,570



			New
	As		Revenue
Statements of Income	Previously		Standard		As
Three Months Ended September 30, 2017	Reported		Adjustment		Restated
Net sales	$	6,066,630	$	17,425	$	6,084,055
Cost of goods sold	4,392,676		7,729		4,400,405
Income tax provision	20,465		5,227		25,692
Net income	17,500		4,469		21,969

Income per common share:
Basic	$	—	$	—	$	—
Diluted	—		—		—

Adoption of the standard related to leases impacted the Company's previously reported results by adding the following line items to the Company's balance sheets:



Balance Sheets	As
June 30, 2018	Restated
Assets:
Operating lease right-of-use assets	$	3,102,263

Current liabilities:
Operating lease liability	254,418

Long-term liabilities:
Operating lease liability	2,847,845

Adoption of the standards related to revenue recognition and leases had no impact on total cash provided by operating activities on the consolidated statements of cash flows.