Income Taxes (Tables)

12 Months Ended

Aug. 31, 2020

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,
	2020		2019
Current:
Federal	$	1,436,000	$	2,911,000
State		664,000		803,000
Foreign		129,000		271,000
		2,229,000		3,985,000
Deferred:
Federal		1,423,000		(378,000)
State		(478,000)		(89,000)
Foreign		—		22,000
		945,000		(445,000)
Total	$	3,174,000	$	3,540,000

Schedule of Effective Income Tax Rate Reconciliation

Income taxes for the years ended August 31, 2020 and 2019 differ from the amounts computed by applying the federal blended and statutory corporate rates of 21% for both 2020 and 2019 to the pre-tax income. The differences are reconciled as follows:

	Years Ended August 31,
	2020			2019
Current:
Expected income tax provision at statutory rate		21.0	%		21.0	%
Increase (decrease) in taxes due to:
State tax, net of federal benefit		5.4	%		5.2	%
Permanent differences		0.3	%		0.3	%
Change in deferred tax asset valuation allowance		(3.8)	%		(0.7)	%
Prior year provisions and Payable True Up		6.4	%		1.0	%
Other, net		(0.5)	%		0.5	%
Income tax expense		28.9	%		27.3	%

Schedule of Deferred Tax Assets and Liabilities

The components of deferred taxes at August 31, 2020 and 2019 are summarized below:

	August 31,
	2020		2019
Deferred tax assets (liabilities):
Net operating loss	$	405,000	$	421,000
Allowance for doubtful accounts		1,000		3,000
Accrued expenses		262,000		270,000
Accrued workers’ compensation		(5,000)		1,000
Inventory adjustments		944,000		887,000
Unrealized losses on investment		54,000		92,000
Excess of tax over book depreciation		(850,000)		(206,000)
Other		63,000		72,000
		874,000		1,540,000
Valuation allowance		––		(421,000)
Total deferred tax assets, net	$	874,000	$	1,119,000