Note 14 - Income Taxes

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(14) Income Taxes

Total income tax expense for the 2022 and 2021 fiscal years consists of the following:

	November 30, 2022		November 30, 2021
Current expense	$	2,712	$	8,459
Deferred expense		16,491		45,800
Total income tax expense	$	19,203	$	54,259

The reconciliation of the statutory Federal income tax rate is as follows:

	November 30, 2022			November 30, 2021
Statutory federal income tax rate		21.0	%		21.0	%
Permanent Differences and Other		(4.6	)		(0.7	)
		16.4	%		20.3	%

Tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) on November 30, 2022 and 2021 are presented as approximate amounts below:

	November 30
	2022			2021
Current deferred tax assets (liabilities):
Accrued expenses	$	93,000		$	82,000
Inventory capitalization		167,000			122,000
NOL and tax credit carryforward		1,921,000			1,846,000
Asset reserves		521,000			613,000
Total current deferred tax assets	$	2,702,000		$	2,663,000
Non-current deferred tax assets
Property, plant, and equipment	$	(97,000	)	$	(41,000	)
Total non-current deferred tax assets (liabilities)	$	(97,000	)	$	(41,000	)
Net deferred taxes	$	2,605,000		$	2,622,000

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company has net operating losses amounting to approximately $4,496,000 and tax credit carryforward amounting to approximately $109,000 for its U.S. operations that will expire on November 30, 2036, 2037, 2038, 2039 and 2040. The Company has another $4,869,000 of net operating losses that can be carried forward indefinitely. Management believes that the Company will be able to utilize the U.S. net operating losses and credits before their expiration.