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Income Taxes | 12 Months Ended
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Oct. 31, 2011
Income Taxes [Abstract] |
Income Taxes | (13) Income Taxes Income tax expense (benefit) for the years ended October 31, 2011, 2010 and 2009 consists of:
Fiscal year ended October 31, 2011 |  | Current |  |  | Deferred |  |  | Total |
U.S. Federal | $ | 137,721 |  | $ | 143,800 |  | $ | 281,521 |
State |  | 128,434 |  |  | (11,703 | ) |  | 116,731 |
Totals | $ | 266,155 |  | $ | 132,097 |  | $ | 398,252 |
Fiscal year ended October 31, 2010 |  | Current |  |  | Deferred |  |  | Total |
U.S. Federal | $ | 652,511 |  | $ | (628,132 | ) | $ | 24,379 |
State |  | 162,974 |  |  | (96,063 | ) |  | 66,911 |
Totals | $ | 815,485 |  | $ | (724,195 | ) | $ | 91,290 |
Fiscal year ended October 31, 2009 |  | Current |  |  | Deferred |  |  | Total |
U.S. Federal | $ | (1,275,461 | ) | $ | 522,570 |  | $ | (752,891 | )
State |  | 3,699 |  |  | 43,533 |  |  | 47,232 |
Totals | $ | (1,271,762 | ) | $ | 566,103 |  | $ | (705,659 | )
Reported income tax expense (benefit) for the years ended October 31, 2011, 2010 and 2009 differs from the "expected" tax expense (benefit), computed by applying the U.S. Federal statutory income tax rate of 34% to income (loss) before income taxes as follows:
|  |  |  |  | Years ended October 31, |  |
|  | 2011 |  |  | 2010 |  |  | 2009 |
"Expected" tax expense (benefit) | $ | 290,955 |  | $ | (2,012,466 | ) | $ | (894,254 | )
Increase (reduction) in income tax expense |  |  |  |  |  |  |  |  |
(benefit) resulting from: |  |  |  |  |  |  |  |  |
Impact of nondeductible write-off of goodwill | — |  |  | 1,897,285 |  |  | — |
Benefits from Sec. 199 manufacturing |  |  |  |  |  |  |  |  |
deduction |  | (13,702 | ) |  | (34,870 | ) |  | — |
Impact of restricted share grants |  | — |  |  | 136,225 |  |  | 105,714 |
State income taxes, net of federal benefit |  | 77,042 |  |  | 44,061 |  |  | 31,173 |
Other differences, net |  | 43,957 |  |  | 61,055 |  |  | 51,708 |
Reported income tax expense (benefit) | $ | 398,252 |  | $ | 91,290 |  | $ | (705,659 | )
The tax effects of temporary differences that give rise to significant portions of the Company's deferred tax assets and deferred tax liabilities as of October 31, 2011 and 2010 are presented below:
|  | October 31, |  |
|  | 2011 |  |  | 2010 |
Deferred tax assets: |  |  |  |  |  |
Accounts receivable, due to allowances for doubtful accounts |  |  |  |  |  |
and sales returns | $ | 137,385 |  | $ | 161,176 |
Inventories, due to allowance for damaged and slow-moving |  |  |  |  |  |
inventories and additional costs inventoried for tax purposes |  |  |  |  |  |
pursuant to the Tax Reform Act of 1986 |  | 790,363 |  |  | 780,656 |
Liabilities recorded for accrued expenses, deductible for tax |  |  |  |  |  |
purposes when paid |  | 521,930 |  |  | 557,849 |
Share-based compensation expense |  | 89,499 |  |  | 71,767 |
Investment in Centric Solutions |  | 166,154 |  |  | 150,832 |
Net operating loss carryforwards |  | 1,140,133 |  |  | 1,328,324 |
Other |  | 85,291 |  |  | 71,496 |
Total gross deferred tax assets |  | 2,930,755 |  |  | 3,122,100 |
Deferred tax liabilities: |  |  |  |  |  |
Plant and equipment, due to differences in depreciation and |  |  |  |  |  |
capital gain recognition |  | (675,223 | ) |  | (735,243 | )
Other receivables, due to accrual for financial reporting |  |  |  |  |  |
purposes |  | (10,955 | ) |  | (10,183 | )
Total gross deferred tax liabilities |  | (686,178 | ) |  | (745,426 | )
Net deferred tax asset | $ | 2,244,577 |  | $ | 2,376,674 |
As a result of the acquisition of AOS, the Company recorded $1,038,335 in deferred tax assets as of October 31, 2009, including net operating loss ("NOL") carryforwards of $851,551 estimated to be available after considering Internal Revenue Code Section 382 limitations. During the fiscal year ended October 31, 2010, certain purchase accounting adjustments, totaling $642,201, were made to increase deferred tax assets recorded as a result of the acquisition and to increase the NOL carryforwards resulting from the acquisition by $666,054 to $1,517,605. These NOL carryforwards may be used to reduce future taxable income and begin to expire in fiscal year ending October 31, 2024. Based on the Company's historical and projected pretax earnings and other relevant factors, management believes that it is more likely than not that the Company's deferred tax assets at October 31, 2011 will be realized. The Company estimates a liability for uncertain tax positions taken or expected to be taken in a tax return. The liability for uncertain tax positions is included in other noncurrent liabilities on the accompanying consolidated balance sheets. A reconciliation of the unrecognized tax benefits for fiscal years 2011 and 2010 follows:
|  | October 31, |
|  | 2011 |  |  | 2010
Unrecognized tax benefits balance at beginning of year | $ | 179,571 |  | $ | 150,052
Gross increases for tax positions of prior years |  | 29,757 |  |  | 29,519
Reductions to unrecognized tax benefits resulting from |  |  |  |  |
the lapse of applicable statute of limitations |  | (4,157 | ) |  | —
Unrecognized tax benefits balance at end of year | $ | 205,171 |  | $ | 179,571
During fiscal year 2011, the Company accrued interest and penalties of $14,392 and $6,761, respectively, related to unrecognized tax benefits. During fiscal year 2010, the Company accrued interest and penalties of $21,240 and $7,047, respectively, related to unrecognized tax benefits. As of October 31, 2011 and 2010, the Company had approximately $100,653 and $79,500, respectively, of accrued interest and penalties related to uncertain tax positions. The total amount of unrecognized tax benefits that would affect the Company's effective tax rate if recognized is $119,883 and $108,070 as of October 31, 2011 and 2010, respectively. The Company does not expect its unrecognized tax benefits to change significantly in the next 12 months. The Company files income tax returns in the U.S. federal jurisdiction and in various state jurisdictions. The statute of limitations remains open for U.S. and certain state income tax examinations for years ended October 31, 2008 through October 31, 2010.

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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 Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: 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 3: 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 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: 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 Reference 6: 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 7: 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 8: 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 + Details
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