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INCOME TAXES
 12 Months Ended
Aug. 31, 2023
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:

          
   2023   2022 
         
Computed tax at the federal statutory rate  $294,398   $391,259 
State taxes, net of federal benefit   62,193    172,074 
Depreciation   —      —   
Inventory reserve   —      —   
Other   1,382    (4,513)
           
Provision for income taxes  $357,973   $558,820 
           
Current income taxes  $357,973   $558,820 
Deferred income taxes   (294,877)   (141,943)
Income tax expense benefit net  $63,096   $416,877 

 

Deferred income tax asset as of August 31, 2023 of $319,875 (August 31, 2022 – $24,998) 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.

          
   2023   2022 
         
Deferred tax assets:          
Allowance for inventory  $496,067   $273,618 
Allowance for bad debts   —      —   
Difference between book and tax depreciation   (86,895)   (150,942)
           
Total deferred tax assets   409,172    122,676 
Valuation allowance   —      —   
           
Net deferred tax assets   409,172    122,676 
           
Net deferred tax liability   (89,297)   (97,678)
           
Combined net deferred tax asset (liability)  $319,875   $24,998