Note E—Marketable Securities Note D—Notes and Accounts Receivable, Net The cost, gross unrealized gains, gross unrealized losses and fair market value for marketable securities by major security type at March 28, 2004 and March 30, 2003 are as follows: Notes and accounts receivable, net, consist of the following: Proceeds from the sale of available-for-sale and trading securities and the resulting gross realized gains and losses included in the deter- mination of net income are as follows: Notes receivable at March 28, 2004 and March 30, 2003 princi- pally resulted from sales of restaurant businesses to Miami Subs’ and Nathan’s franchisees and are generally guaranteed by the purchaser and collateralized by the restaurant businesses and assets sold. The notes are generally due in monthly installments of principal and interest with a balloon payment at the end of the term, with interest rates ranging principally between 5% and 10% (See Note B-5). Accounts receivable are due within 30 days and are stated at amounts due from franchisees and licensees, net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the indus- try as a whole. The Company writes off accounts receivable when they are deemed to be uncollectible. Changes in the Company’s allowance for doubtful accounts are as follows: Effective April 1, 2002, the Company transferred the Company’s bond portfolio formerly classified as trading securities to available-for- sale securities due to a change in the Company’s investment strategies. As required by SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” the transfer of these securities between categories of investments has been accounted for at fair value and the unrealized holding loss previously recorded through April 1, 2002 of $20 from the trading category has not been reversed. The net unreal- ized gains for the fiscal years ended March 28, 2004 and March 30, 2003, respectively, of $3 and $64, net of deferred income taxes, has been included as a component of comprehensive income.  During the fiscal year ended March 30, 2003, the Company liq- uidated its investment in limited partnership and received proceeds of $767 and recorded a loss of $252 which is included as a component of investment and other income in the accompanying consolidated statement of operations for the fiscal year ended March 30, 2003.  2004 2003 2002 Available-for-sale securities: Proceeds $2,497 $6,088 $ — Gross realized gains 17 12 — Gross realized losses (5) (2) — Trading securities: Proceeds $ — $ 767 $2,933 Gross realized gains — — 8 Gross realized losses — (252) (1) Gross Gross Fair Unrealized Unrealized Market Cost Gains Losses Value 2004: Available-for-sale securities: Bonds $7,382 $107 $(12) $7,477 2003: Available-for-sale securities: Bonds $ 4,513 $181 $(71) $ 4,623 March 28, March 30, 2004 2003 Notes receivable, net of impairment charges $ 573 $ 998 Franchise and license royalties 1,404 1,465 Branded product sales 687 737 Other 329 565 2,993 3,765 Less: allowance for doubtful accounts 328 418 Less: notes receivable due after one year 313 740 Notes and accounts receivable, net $2,352 $2,607 2004 2003 2002 Beginning balance $418 $ 644 $ 880 Bad debt (recoveries) expense (17) 82 267 Other — — 27 Accounts written off (73) (308) (530) Ending balance $328 $ 418 $ 644 2004 Annual Report  Nathan’s Famous, Inc. & Subsidiaries page twenty-five