XML 25 R12.htm IDEA: XBRL DOCUMENT v3.22.2.2
INCOME TAXES
 12 Months Ended
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:

 

          
   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.

 

          
   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)