XML 48 R14.htm IDEA: XBRL DOCUMENT
v2.4.0.6

7. INCOME TAXES | 12 Months Ended
--- | ---
Oct. 31, 2012
Income Tax Disclosure [Abstract] |
INCOME TAXES | The Company’s provision for income taxes in 2011 and 2011 consisted of the following:
|  | 2012 |  |  | 2011 |
Current |  |  |  |  |  |
Federal |  | $ | 1,145,145 |  |  | $ | 1,036,645 |
State and local |  |  | 134,736 |  |  |  | 15,377 |
|  |  | 1,279,881 |  |  |  | 1,052,022 |
Deferred |  |  |  |  |  |  |  |
Federal |  |  | 211,000 |  |  |  | (782,000 | )
State and local |  |  | (20,500 | ) |  |  | (40,500 | )
|  |  | 190,500 |  |  |  | (822,500 | )
Income tax expense |  | $ | 1,470,381 |  |  | $ | 229,522 |
A reconciliation of the difference between the expected income tax rate using the statutory federal tax rate and the Company’s effective tax rate is as follows:
|  | 2012 |  |  | 2011 |
Tax at the federal statutory rate of 34% |  | $ | 1,378,625 |  |  | $ | 365,672 |
Non controlling interest |  |  | (33,600 | ) |  |  | (11,600 | )
Amortization |  |  | (14,900 | ) |  |  | (14,900 | )
Section 199 |  |  | (23,100 | ) |  |  | (40,000 | )
Accrual adjustments |  |  | 50,430 |  |  |  | – |
Other permanent differences |  |  | 24,000 |  |  |  | (25,600 | )
State and local tax, net of federal |  |  | 88,926 |  |  |  | (44,050 | )
Provision for income taxes |  | $ | 1,470,381 |  |  | $ | 229,522 |
Effective income tax rate |  |  | 36 | % |  |  | 21 | %
The tax effects of the temporary differences that give rise to the deferred tax assets and liabilities as of October 31, 2012 and 2011 are as follows:
|  | 2012 |  |  | 2011 |
Current deferred tax assets: |  |  |  |  |  |
Accounts receivable |  | $ | 77,543 |  |  | $ | 91,400 |
Unrealized loss |  |  | 580,390 |  |  |  | 758,000 |
Inventory |  |  | 44,722 |  |  |  | 47,000 |
Total current deferred tax asset |  | $ | 702,655 |  |  | $ | 896,400 |
Non-current deferred tax assets: |  |  |  |  |  |  |  |
Deferred rent |  |  | 60,484 |  |  |  | 50,600 |
Deferred compensation |  |  | 191,861 |  |  |  | 190,500 |
Total non-current deferred tax asset |  | $ | 252,345 |  |  | $ | 241,100 |
Total deferred tax asset |  | $ | 955,000 |  |  | $ | 1,137,500 |
Non-current deferred tax liability: |  |  |  |  |  |  |  |
Fixed assets |  |  | 285,000 |  |  |  | 277,000 |
Total deferred tax liabilities |  | $ | 285,000 |  |  | $ | 277,000 |
A valuation allowance was not provided at October 31, 2012 or 2011. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are expected to be deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income are reduced. As of October 31, 2012 and 2011, the Company did not have any unrecognized tax benefits or open tax positions. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of October 31, 2012 and 2011, the Company had no accrued interest or penalties related to income taxes. The Company currently has no federal or state tax examinations in progress. The Company files a U.S. federal income tax return and California, Colorado, New Jersey, New York, Texas and Oregon state tax returns. The Company’s federal income tax return is no longer subject to examination by the federal taxing authority for years before fiscal 2007. The Company’s California, Colorado and New Jersey income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2006. The Company’s Oregon, New York, Kansas and Texas income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2007.

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration