Income Taxes (Tables)

12 Months Ended

Aug. 31, 2019

Income Taxes

Schedule of Components of Income Tax Expense (Benefit)

The following summarizes the Company’s provision for income taxes on income from operations:

	Years Ended August 31,
	2019		2018
Current:
Federal	$	2,911,000	$	2,249,000
State		803,000		660,000
Foreign		271,000		(35,000)
		3,985,000		2,874,000
Deferred:
Federal		(378,000)		401,000
State		(89,000)		(82,000)
Foreign		22,000		(22,000)
		(445,000)		297,000
Total	$	3,540,000	$	3,171,000

Schedule of Effective Income Tax Rate Reconciliation

Income taxes for the years ended August 31, 2019 and 2018 differ from the amounts computed by applying the federal blended and statutory corporate rates of 21% for 2019 and 25% for 2018 to the pre-tax income. The differences are reconciled as follows:

	Years Ended August 31,
	2019			2018
Current:
Expected income tax provision at statutory rate		21.0	%		25.7	%
Increase (decrease) in taxes due to:
State tax, net of federal benefit		5.2	%		5.4	%
Permanent differences		0.3	%		0.3	%
Change in deferred tax asset valuation allowance		(0.7)	%		—
Other, net		1.4	%		(0.1)	%
Income tax expense		27.3	%		31.3	%

Schedule of Deferred Tax Assets and Liabilities

The components of deferred taxes at August 31, 2019 and 2018 are summarized below:

	August 31,
	2019		2018
Deferred tax assets (liabilities):
Net operating loss	$	421,000	$	508,000
Allowance for doubtful accounts		3,000		(5,000)
Accrued expenses		270,000		209,000
Accrued workers’ compensation		1,000		7,000
Inventory adjustments		887,000		708,000
Unrealized losses on investment		92,000		(7,000)
Excess of tax over book depreciation		(206,000)		(235,000)
Other		71,800		26,500
Total deferred tax assets		1,539,800		1,211,500
Valuation allowance		(421,000)		(509,000)
Total deferred tax assets	$	1,118,500	$	702,500