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INCOME TAXES | 12 Months Ended
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Aug. 31, 2022
Income taxes (note 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:
Schedule of Components of Income Tax Expense (Benefit) |  |  |  |  |  |  |  |
|  | 2022 |  |  | 2021 |
Computed tax at the federal statutory rate |  | $ | 391,259 |  |  | $ | 928,062 |
State taxes, net of federal benefit |  |  | 172,074 |  |  |  | 204,632 |
Depreciation |  |  | — |  |  |  | (47,828 | )
Inventory reserve |  |  | — |  |  |  | 3,665 |
Other |  |  | (4,513 | ) |  |  | (139,269 | )
Provision for income taxes |  | $ | 558,820 |  |  | $ | 949,262 |
Current income taxes |  | $ | 558,820 |  |  | $ | 949,262 |
Deferred income taxes |  |  | (141,943 | ) |  |  | 19,993 |
Income tax expense benefit net |  | $ | 416,877 |  |  | $ | 969,255 |
Deferred income tax asset as of August 31, 2022 of $24,998 (August 31, 2021 – liability of $116,945) 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.
Schedule of Deferred Tax Assets and Liabilities |  |  |  |  |  |  |  |
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for inventory |  | $ | 273,618 |  |  | $ | 97,678 |
Allowance for bad debts |  |  | — |  |  |  | — |
Difference between book and tax depreciation |  |  | (150,942 | ) |  |  | (113,421 | )
Total deferred tax assets |  |  | 122,676 |  |  |  | (15,743 | )
Valuation allowance |  |  | — |  |  |  | — |
Net deferred tax assets |  |  | 122,676 |  |  |  | (15,743 | )
Net deferred tax liability |  |  | (97,678 | ) |  |  | (101,202 | )
Combined net deferred tax asset (liability) |  | $ | 24,998 |  |  | $ | (116,945 | )

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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