NOTE 6 – INCOME TAXES

At May 31, 2013 and June 1, 2012 the provision for income taxes consists of the following:

	2013			2012
Current:
Federal	$	992,003		$	956,326
State		236,454			224,324

		1,228,457			1,180,650

Deferred:
Federal		(150,610	)		413,513
State		(35,329	)		144,063

		(185,939	)		557,576

Total	$	1,042,518		$	1,738,226

The effective tax rate for continuing operations differs from the expected tax using statutory rates. A reconciliation between the expected tax and actual tax follows:

	2013		2012

Tax on income at statutory rates	$	740,028	$	1,341,589
Increase resulting from:
State income taxes, less Federal income tax effect		156,060		148,054
Other - net		146,430		248,583

Total	$	1,042,518	$	1,738,226

The tax effects of temporary differences that result in deferred tax assets and liabilities are as follows:

	2013		2012
Deferred tax assets
Salary continuation plan	$	467,194	$	486,108
Accrued vacation		539,495		518,946
Inventory capitalization		65,515		72,937
Allowance for doubtful accounts		26,600		26,600
Other accrued expenses		141,511		118,960

Gross deferred tax assets before valuation allowance		1,240,315		1,223,551
Less valuation allowance		-		-

Total deferred tax assets		1,240,315		1,223,551

Deferred tax liabilities
Property and equipment		3,867,929		4,031,269
Prepaid expenses		80,570		86,405
Total deferred tax liabilities		3,948,499		4,117,674

Net deferred tax liability	$	2,708,184	$	2,894,123