| Summary of temporary differences |
|
At May 31, 2013 and November 30, 2012, respectively, the Company had temporary differences arising from the following:
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May 31, 2013 |
|
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|
|
Classified As |
Type |
|
Amount |
|
Deferred Tax |
|
Short-Term
Asset |
|
Long-Term
(Liability) |
Depreciation |
|
$ |
(968,029 |
) |
|
$ |
(357,238 |
) |
|
$ |
— |
|
|
$ |
(357,238 |
) |
Unrealized (gain) on investments |
|
(193,114 |
) |
|
(71,266 |
) |
|
(71,266 |
) |
|
— |
|
Reserve for bad debts |
|
26,512 |
|
|
9,784 |
|
|
9,784 |
|
|
— |
|
Reserve for returns |
|
1,901,663 |
|
|
701,783 |
|
|
701,783 |
|
|
— |
|
Reserve for obsolete inventory |
|
531,576 |
|
|
196,171 |
|
|
196,171 |
|
|
— |
|
Vacation accrual |
|
319,669 |
|
|
117,970 |
|
|
117,970 |
|
|
— |
|
Charitable contributions |
|
818,318 |
|
|
301,989 |
|
|
9,964 |
|
|
292,025 |
|
Section 263A costs |
|
313,076 |
|
|
115,536 |
|
|
115,536 |
|
|
— |
|
Loss carry forward |
|
1,789,024 |
|
|
660,215 |
|
|
660,215 |
|
|
— |
|
Net deferred tax asset (liability) |
|
|
|
$ |
1,674,944 |
|
|
$ |
1,740,157 |
|
|
$ |
(65,213 |
) |
|
|
|
|
|
November 30, 2012 |
|
|
|
|
|
|
Classified As |
Type |
|
Amount |
|
Deferred Tax |
|
Short-Term
Asset |
|
Long-Term
(Liability) |
Depreciation |
|
$ |
(1,028,273 |
) |
|
$ |
(379,470 |
) |
|
$ |
— |
|
|
$ |
(379,470 |
) |
Unrealized (gain) on investments |
|
(55,863 |
) |
|
(20,616 |
) |
|
(20,616 |
) |
|
— |
|
Reserve for bad debts |
|
26,340 |
|
|
9,721 |
|
|
9,721 |
|
|
— |
|
Reserve for returns |
|
1,772,405 |
|
|
654,083 |
|
|
654,083 |
|
|
— |
|
Reserve for obsolete inventory |
|
671,609 |
|
|
247,849 |
|
|
247,849 |
|
|
— |
|
Vacation accrual |
|
323,470 |
|
|
119,372 |
|
|
119,372 |
|
|
— |
|
Charitable contributions |
|
722,555 |
|
|
266,649 |
|
|
126,852 |
|
|
139,797 |
|
Section 263A costs |
|
285,129 |
|
|
105,223 |
|
|
105,223 |
|
|
— |
|
Net deferred tax asset (liability) |
|
|
|
$ |
1,002,811 |
|
|
$ |
1,242,484 |
|
|
$ |
(239,673 |
) |
|
| Schedule of income tax expense |
|
Income tax (benefit) expense is made up of the following components:
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Three Months Ended |
Six Months Ended |
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|
May 31, 2013 |
|
May 31, 2012 |
May 31, 2013 |
|
May 31, 2012 |
Current tax - Federal |
|
$ |
— |
|
|
$ |
180,130 |
|
$ |
— |
|
|
$ |
191,618 |
|
Current tax - State & Local |
|
22,559 |
|
|
57,071 |
|
23,111 |
|
|
60,540 |
|
Deferred tax (benefit) expense |
|
(64,501 |
) |
|
(37,548 |
) |
(722,783 |
) |
|
14,407 |
|
Total tax (benefit) expense |
|
$ |
(41,942 |
) |
|
$ |
199,653 |
|
$ |
(699,672 |
) |
|
$ |
266,565 |
|
|
| Provision for income taxes computed at the statutory rate |
A reconciliation of the (benefit) provision for income taxes computed at the statutory rate to the effective rate for the three months ended May 31, 2013 and May 31, 2012 is as follows:
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Three Months Ended |
|
Three Months Ended |
|
|
May 31, 2013 |
|
May 31, 2012 |
|
|
Amount |
|
Percent of Pretax Income |
|
Amount |
|
Percent of Pretax Income |
(Benefit) provision for income taxes at federal statutory rate |
|
$ |
(67,585 |
) |
|
34.00 |
% |
|
$ |
170,596 |
|
|
34.00 |
% |
Increases in taxes resulting from: |
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|
|
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|
State income taxes, net of federal income tax benefit |
|
(5,765 |
) |
|
2.90 |
% |
|
32,112 |
|
|
6.40 |
% |
Non-deductible expenses and other adjustments |
|
31,408 |
|
|
(15.80 |
)% |
|
(3,055 |
) |
|
(0.61 |
)% |
(Benefit) provision for income taxes at effective rate |
|
$ |
(41,942 |
) |
|
21.10 |
% |
|
$ |
199,653 |
|
|
39.79 |
% |
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