Income Taxes

12 Months Ended

Oct. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

(8) Income Taxes

Income tax benefit attributable to income from continuing operations consists of:

			2012		2011
Current income tax provision:
	Federal	$	547,619	$	21,076
	State		93,741		3,115
			641,360		24,191
Deferred income tax provision:
	Federal		34,056		349,485
	State		5,830		59,824
			39,886		409,309
		$	681,246	$	433,500

The differences between income taxes as provided at the federal statutory tax rate of 34% and the Company’s actual income taxes are as follows:

			2012		2011
Expected federal income tax expense at
	Statutory rate	$	642,150	$	379,835
State income tax expense, net federal
	income tax effect		69,256		41,000
Other - meals and entertainment			6,530		4,753
Other			(36,690)		7,912
Income tax provision		$	681,246	$	433,500

Tax assets are recognized in the balance sheet if it is more likely than not that they will be realized on future tax returns. As of October 31, 2012 and 2011, the net deferred tax assets were $151,501 and $191,387, respectively. The Company determined it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets of October 31, 2012 and 2011 and no valuation allowance is deemed necessary. The realization of deferred tax assets will depend on the Company’s ability to continue to generate taxable income in the future.

The significant components of the net deferred income taxes at October 31, 2012 and 2011 are as follows:

				2012		2011
Deferred tax assets
	Inventory Reserve		$	76,765	$	76,765
	Other Reserves and allowences			100,844		117,165
	Section 263A			104,038		84,634
	Alternative minimum tax credit carryforwards			0		37,685
		Total deferred tax assets		281,647		316,249
Deferred tax liabilities
	Property, plant, and equipment			(130,146)		(124,862)
		Total gross deferred tax liabilities		(130,146)		(124,862)
	Net deferred income taxes		$	151,501	$	191,387

Net federal operating loss carryforwards for income tax purposes were used in their entirety in fiscal 2011. The Company has applied an alternative minimum tax credit carryforward of $37,685 in fiscal 2012. 

For the years ended October 31, 2012 and 2011, the Company did not have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period. No interest or penalties have been recorded as a result of tax uncertainties. Our evaluation was performed for the tax years ended October 31, 2005 through October 31, 2012, the tax years which remain subject to examination by tax jurisdictions as of October 31, 2012.