Telkonet, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

NOTE R - INVENTORY

NOTE R - INVENTORY

9 Months Ended

Sep. 30, 2011

NOTE F – INVENTORY

Inventories as of September 30, 2011 and December 31, 2010 are as follows:

	September 30, 2011			December 31, 2010
Inventory, gross	$	859,821		$	799,402
Reserve for obsolescence		(140,000	)		(200,000	)
Inventory, net	$	719,821		$	599,402

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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