| Income Taxes |
| 6. Income Taxes |
The following are the components of income taxes: |
| Years ended June 30, |
|
2015 |
|
2014 |
| |
|
|
|
|
| Current |
|
|
|
|
|
|
|
|
| Federal |
|
$ |
878,700 |
|
|
$ |
831,695 |
|
| State |
|
|
150,416 |
|
|
|
142,370 |
|
| |
|
|
1,029,116 |
|
|
|
974,065 |
|
| |
|
|
|
|
|
|
|
|
| Deferred |
|
|
|
|
|
|
|
|
| Federal |
|
|
(15,527 |
) |
|
|
8,843 |
|
| State |
|
|
(2,658 |
) |
|
|
1,513 |
|
| |
|
|
(18,185 |
) |
|
|
10,356 |
|
| |
|
$ |
1,010,931 |
|
|
$ |
984,421 |
|
| 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, |
|
2015 |
|
2014 |
| |
|
|
|
|
| Tax at the statutory rate |
|
$ |
912,134 |
|
|
$ |
885,607 |
|
State income taxes,
net of federal benefit |
|
|
97,384 |
|
|
|
94,551 |
|
| Other |
|
|
1,413 |
|
|
|
4,263 |
|
| |
|
$ |
1,010,931 |
|
|
$ |
984,421 |
|
| |
|
|
|
|
|
|
|
|
| Effective tax rate |
|
|
37.7 |
% |
|
|
37.8 |
% |
| 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, |
|
2015 |
|
2014 |
| |
|
|
|
|
| Current deferred tax assets: |
|
|
|
|
|
|
|
|
| Allowance for doubtful accounts |
|
$ |
50,425 |
|
|
$ |
52,683 |
|
| Inventory capitalization |
|
|
36,361 |
|
|
|
29,627 |
|
| Inventory reserves |
|
|
22,475 |
|
|
|
18,467 |
|
| |
|
|
109,261 |
|
|
|
100,777 |
|
| |
|
|
|
|
|
|
|
|
| Noncurrent deferred tax assets (liabilities): |
|
|
|
|
|
|
|
|
| Equipment and improvements |
|
|
16,667 |
|
|
|
5,685 |
|
Franchise, trademarks and other
intangible assets |
|
|
— |
|
|
|
1,282 |
|
| |
|
|
16,667 |
|
|
|
6,967 |
|
| Total net deferred income tax assets |
|
$ |
125,928 |
|
|
$ |
107,744 |
|
|
|
As of June 30, 2015, the Company was subject to potential Federal and State tax examinations for the tax years 2011 through 2014.
|
|