XML 32 R8.htm IDEA: XBRL DOCUMENT

3-Income Taxes

12 Months Ended

Dec. 31, 2013

3-—Income Taxes—The provision for income tax expense consists of the following:

	2013	2012
Current:
Federal………………………………………………………….	$ 967,000	$ 624,000
State…………………………………………………………….	61,000	42,000
Deferred………………………………………………………….	119,000	171,000
	$ 1,147,000	$ 837,000

The following is a reconciliation of the statutory federal income tax rate to the actual effective tax rate:

	2013		2012
	Amount	%	Amount	%
Expected tax at U.S. statutory rate…………	$ 1,233,000	34. 0	$ 878,000	34.0
Permanent differences………………………	(127,000)	(3.5)	(69,000)	(2.7)
State taxes, net of federal benefit………….	41,000	1.1	28,000	1.1
Income tax expense…………………………	$ 1,147,000	31.6	$ 837,000	32.4

The Company’s effective tax rates were lower than the U.S. federal statutory rate in 2013 and 2012 primarily due to the Domestic Production Activities Deduction allowed under Internal Revenue Code Section 199.

The deferred tax liabilities and assets consist of the following:

	2013	2012

Depreciation and amortization………………………………..	$ (1,065,275)	$ (952,275)
Inventory………………………………………………………..	256,474	274,826
Accrued vacation………………………………………………	100,314	89,785
Allowance for doubtful accounts……………………………..	52,500	51,450
Other, net……………………………………………………….	903	130
	410,191	416,191
	$ (655,084)	$ (536,084)

Valuation allowances related to deferred taxes are recorded based on the “more likely than not” realization criteria. The Company reviews the need for a valuation allowance on a quarterly basis for each of its tax jurisdictions. A deferred tax valuation allowance was not required at December 31, 2013 or 2012.

- 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+ Details