(dollars in thousands) 2004 2003 Raw materials and parts $ 7,091 $ 3,798 Work in process 5,492 5,288 Finished goods 19,971 15,667 32,554 24,753 LIFO reserve 218 629 Total $ 32,772 $ 25,382 (dollars in thousands) 2004 2003 Land $ 4,925 $ 4,925 Building and improvements 18,277 18,409 Furniture and fixtures 8,765 8,604 Machinery and equipment 22,204 22,129 54,171 54,067 Less accumulated depreciation (31,191) (29,146) $ 22,980 $ 24,921 Description Life Building and improvements 20 to 40 years Furniture and fixtures 5 to 7 years Machinery and equipment 3 to 10 years (dollars in thousands) 2004 2003 Accrued payroll and related expenses $ 12,493 $ 7,094 Accrued warranty 10,563 11,563 Accrued customer rebates 9,350 6,935 Accrued pension settlement 3,637 — Accrued product liability and workers comp 1,828 3,398 Other accrued expenses 13,440 8,086 $ 51,311 $ 37,076 reserves for inventory obsolescence and shrinkage based on its judgment of future realization. Inventories at January 1, 2005  and January 3, 2004 are as follows: Property and equipment are depreciated or amortized on a straight-line basis over their useful lives based on management’s estimates of the period over which the assets will be utilized  to benefit the operations of the company. The useful lives are  estimated based on historical experience with similar assets, taking into account anticipated technological or other changes. The company periodically reviews these lives relative to physical factors, economic factors and industry trends. If there are changes in the planned use of property and equipment or  if technological changes were to occur more rapidly than antici- pated, the useful lives assigned to these assets may need to be shortened, resulting in the recognition of increased depreciation and amortization expense in future periods. Following is a summary of the estimated useful lives: Depreciation expense is provided for using the straight-line method and amounted to $3,150,000, $3,583,000 and $3,967,000 in fiscal 2004, 2003 and 2002, respectively. (H) LITIGATION MATTERS  From time to time, the company  is subject to proceedings, lawsuits and other claims related to  products, suppliers, employees, customers and competitors. The company maintains insurance to cover product liability, workers compensation, property and casualty, and general liability matters. The company is required to assess the likelihood of any adverse judgments or outcomes to these matters as well  as potential ranges of probable losses. A determination of the amount of accrual required, if any, for these contingencies is made after assessment of each matter and the related insurance coverage. The required accrual may change in the future due to new developments or changes in approach such as a change in settlement strategy in dealing with these matters. The company does not believe that any such matter will have a material adverse effect on its financial condition, results of operations or cash  flows of the company. (E) PROPERTY, PLANT AND EQUIPMENT  Property, plant and  equipment are carried at cost as follows: (G) ACCRUED EXPENSES  Accrued expenses consist of the following at January 1, 2005 and January 3, 2004, respectively: (F) GOODWILL AND OTHER INTANGIBLES  Goodwill and other intan- gibles are reviewed for impairment annually or whenever events  or circumstances indicate that the carrying value of an asset  may not be recoverable. For long-lived assets held for use, an impairment loss is recognized when the estimated undiscounted cash flows produced by an asset are less than the asset’s carrying value. Estimates of future cash flows are judgments based on  the company’s experience and knowledge of operations. These estimates can be significantly impacted by many factors including changes in global and local business and economic conditions, operating costs, inflation, competition, and consumer and demo- graphic trends. If the company’s estimates or the underlying assumptions change in the future, the company may be required to record impairment charges. Expenditures which significantly extend useful lives are capital- ized. Maintenance and repairs are charged to expense as incurred. Asset impairments are recorded whenever events or changes in circumstances indicate that the recorded value of an asset is less than the sum of its expected future undiscounted cash flows. 23