Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.8
Income Taxes
12 Months Ended
Jun. 30, 2013
Income Taxes  
Income Taxes
6. Income Taxes The following are the components of income taxes:

 

Years ended June 30,   2013   2012
         
Current                
Federal   $ 811,960     $ 248,257  
State     138,990       42,497  
      950,950       290,754  
                 
Deferred                
Federal     24,270       21,988  
State     4,156       3,764  
      28,426       25,752  
    $ 979,376     $ 316,506  

 

  The reconciliation of income tax expense computed at the Federal statutory tax rate of 34% to the provision for income taxes is as follows:

 

Years ended June 30,   2013   2012
         
Tax at the statutory rate   $ 879,449     $ 281,586  
State income taxes, net of federal benefit     93,894       30,064  
Other     6,033       4,856  
    $ 979,376     $ 316,506  
                 
Effective tax rate     37.9 %     38.2 %

 

  Deferred income taxes reflect the net tax effect of temporary differences between the bases of assets and liabilities for financial reporting purposes and the bases used for income tax purposes.  Significant components of the Company’s current and noncurrent deferred tax assets and liabilities are as follows:

 

Years ended June 30,   2013   2012
         
Current deferred tax assets:                
Allowance for doubtful accounts   $ 58,327     $ 58,327  
Inventory capitalization     21,063       34,234  
Inventory reserves     19,436       26,902  
      98,826       119,463  
                 
Noncurrent deferred tax assets (liabilities):                
Equipment and improvements     4,613       (1,890 )
Franchise, trademarks and other intangible assets     14,661       28,953  
      19,274       27,063  
Total net deferred income tax assets   $ 118,100     $ 146,526  

 

 

 

As of June 30, 2013, the Company was subject to potential Federal and State tax examinations for the tax years 2009 through 2012.