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Income taxes | 12 Months Ended
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Oct. 31, 2012
Income Tax Disclosure [Abstract] |
Income taxes | Note 6 - Income taxes The provision (benefit) for income taxes consists of the following:
|  | 2012 |  |  | 2011 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | 1,330,935 |  |  | $ | 318,148 |
State |  |  | 314,863 |  |  |  | 43,744 |
|  |  | 1,645,798 |  |  |  | 361,892 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | (141,892 | ) |  |  | 24,540 |
State |  |  | (3,419 | ) |  |  | (7,600 | )
|  |  | (145,311 | ) |  |  | 16,940 |
Totals |  | $ | 1,500,487 |  |  | $ | 378,832 |
Income tax at the Federal statutory rate is reconciled to the Company's actual net provision for income taxes as follows:
|  | 2012 |  |  | 2011 |
|  | Amount |  |  | % of Pretax Income |  |  | Amount |  |  | % of Pretax Income |
Income tax at Federal statutory rate |  | $ | 1,397,891 |  |  |  | 34.0 | % |  | $ | 392,500 |  |  |  | 34.1 | %
State tax provision, net of Federal tax benefit |  |  | 229,928 |  |  |  | 5.6 |  |  |  | 23,855 |  |  |  | 2.1 |
Nondeductible differences: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ISO stock options, net |  |  | 7,182 |  |  |  | 0.2 |  |  |  | 16,297 |  |  |  | 1.4 |
Business acquisition costs |  |  | - |  |  |  | - |  |  |  | 131,504 |  |  |  | 11.4 |
Qualified domestic production deduction |  |  | (46,121 | ) |  |  | (1.1 | ) |  |  | - |  |  |  | - |
Other |  |  | 36,252 |  |  |  | 0.9 |  |  |  | - |  |  |  | - |
Uncertain tax positions |  |  | (79,223 | ) |  |  | (1.9 | ) |  |  | (116,284 | ) |  |  | (10.1 | )
R&D credit |  |  | - |  |  |  | - |  |  |  | (86,166 | ) |  |  | (7.5 | )
Other |  |  | (45,422 | ) |  |  | (1.2 | ) |  |  | 17,126 |  |  |  | 1.5 |
Provision for income taxes |  | $ | 1,500,487 |  |  |  | 36.5 | % |  | $ | 378,832 |  |  |  | 32.9 | %
The Company's total deferred tax assets and deferred tax liabilities at October 31, 2012 and 2011 are as follows:
|  | 2012 |  |  | 2011 |
Current Assets: |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 37,500 |  |  | $ | 40,000 |
Inventory obsolescence |  |  | 65,700 |  |  |  | 58,600 |
Accrued vacation |  |  | 154,000 |  |  |  | 114,100 |
State income taxes |  |  | 118,400 |  |  |  | 19,700 |
Stock based compensation awards |  |  | 235,600 |  |  |  | 209,600 |
Section 263A costs |  |  | 128,800 |  |  |  | 132,800 |
Other |  |  | 20,966 |  |  |  | 35,900 |
Total current assets |  |  | 760,966 |  |  |  | 610,700 |
Long-Term Assets: |  |  |  |  |  |  |  |
Amortization / intangible assets |  |  | 103,400 |  |  |  | 116,900 |
Long-Term Liabilities: |  |  |  |  |  |  |  |
Amortization / intangible assets |  |  | (799,400 | ) |  |  | (880,600 | )
Depreciation / equipment and furnishings |  |  | (381,157 | ) |  |  | (308,500 | )
Net long-term deferred tax liabilities |  |  | (1,077,157 | ) |  |  | (1,072,200 | )
Total deferred tax liabilities |  | $ | (316,191 | ) |  | $ | (461,500 | )
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follow:
Balance at November 1, 2010 |  | $ | 216,171 |
Lapse of statute of limitations- tax positions in prior period |  |  | (136,948 | )
Balance at October 31, 2011 |  |  | 79,223 |
Lapse of statute of limitations - tax positions in prior period |  |  | (79,223 | )
Balance at October 31, 2012 |  | $ | - |
The Company had no gross liability for unrecognized tax benefits at October 31, 2012. At October 31, 2011 the Company’s total gross liability for unrecognized tax benefits was $79,223, including $18,947 of interest and penalties. During the year ended October 31, 2012, a reduction of $18,947 of interest was a result of the expiration of the statute of limitations. As of October 31, 2012, $0 of accrued interest and penalties were included in other long-term liabilities in the balance sheet. As of October 31, 2011, $18,947 of accrued interest and penalties were included in other long-term liabilities in the balance sheet. The Company is currently not undergoing any tax examinations. Tax fiscal years ended October 31, 2008 through October 31, 2012 remain subject to examinations.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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