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6. Income Taxes
 12 Months Ended
Aug. 31, 2015
Notes  
6. Income Taxes

6.             INCOME TAXES

 

A reconciliation of the provision for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows:

 

 

 

2015

 

2014

 

 

 

 

 

 

 

 

Computed tax at the federal statutory rate

$  1,002,996

 

$  1,056,815

State taxes, net of federal benefit

144,893

 

154,111

Depreciation

16,473

 

12,253

Inventory reserve

33,216

 

5,952

Other

10,699

 

27,646

 

 

 

 

Provision for income taxes

$  1,208,277

 

$  1,256,777

 

 

 

 

Current income taxes

$  1,208,277

 

$  1,246,198

Deferred income taxes

(26,672)

 

10,579

Total income tax expense

$  1,818,605

 

$  1,256,777

 

 

Deferred income tax liability as of August 31, 2015 of $34,300 (August 31, 2014 – $60,972) reflects the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

 

 

 

2015

 

2014

 

 

 

 

 

 

 

 

Deferred tax assets:

 

 

 

  Allowance for inventory

$  66,745

 

$    58,576

  Allowance for bad debts

0

 

0

  Difference between book and tax depreciation

37,014

 

18,511

 

 

 

 

Total deferred tax assets

103,759

 

77,087

Valuation allowance

0

 

0

 

 

 

 

Net deferred tax assets

$  103,759

 

$    77,087

 

 

 

 

Net deferred tax liability

(138,059)

 

(138,059)

 

 

 

 

Combined net deferred tax asset (liability)

$   (34,300)

 

$   (60,972)