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SEC Filings
10-Q
ARGON ST, INC. filed this Form 10-Q on 12/13/1995
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
October 31, 1995

Note A - Basis of Presentation

The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal
recurring adjustments) that are, in the opinion of management, necessary
for a fair presentation of the results of operation, financial position
and cash flows for the periods presented.  The accompanying unaudited
financial statements have been prepared in accordance with the
instructions to Form 10-Q and, therefore, do not include all information
necessary to be in conformity with generally accepted accounting
principles.

Reference is made to the Notes to Consolidated Financial Statements in
the Annual Report to Stockholders for the year ended July 31, 1995.

The results of operations for the three months ended October 31, 1995 are
not necessarily indicative of the results to be expected for the full
year.

Note B - Unbilled Accounts Receivable

Unbilled accounts receivable represent the revenue recognized pursuant to
standard system contracts and customer-funded product development
contracts using the percentage-of-completion method but which are not yet
billable under the terms of the contract.  These amounts are billable
based on contract terms either upon shipment of the items, presentations
of invoices, or completion of the contract.  The cost of such revenue is
determined generally by separate job cost accounts and involves no
deferral of cost.  If the estimated total costs on any contract indicate
a loss, the entire amount of the estimated loss is recognized
immediately.

Note C - Inventory

Inventory includes work-in-process of approximately $111,000 and $91,000
as of October 31, 1995 and July 31, 1995, respectively.  The remaining
inventory consists of parts and subassemblies, both purchased and
manufactured, that could be used in the manufacturing process or sold as
spare parts.

Note D - Income Taxes

The Company's provision for income taxes for the period ended October 31,
1994 was determined using the Company's estimated annual effective rate. 
The difference between the Company's effective rate and the statutory
rate of 35% is primarily due to surtax exemptions.


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