Income Taxes (Tables)
|
3 Months Ended |
Feb. 28, 2018 |
Income Tax Disclosure [Abstract] |
|
Schedule of effect of tax rate change |
The following chart shows the effect of the tax rate change on the Company's Consolidated Statements of Operations:
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Previous 36.45% Rate |
Effect of Rate Change |
New 24.13% Rate |
Loss before provision for Income Taxes |
$ |
(107,189 |
) |
$ |
— |
|
$ |
(107,189 |
) |
(Benefit) provision for Income Taxes |
(36,676 |
) |
3,150,146 |
|
3,113,470 |
|
Net Loss |
$ |
(70,513 |
) |
$ |
(3,150,146 |
) |
$ |
(3,220,659 |
) |
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|
Loss per Share: |
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|
Basic |
(0.01 |
) |
(0.44 |
) |
(0.45 |
) |
Diluted |
(0.01 |
) |
(0.44 |
) |
(0.45 |
) |
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Weighted Average Shares Outstanding: |
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|
|
Basic |
7,126,684 |
|
7,126,684 |
|
7,126,684 |
|
Diluted |
7,126,684 |
|
7,126,684 |
|
7,126,684 |
|
The following chart shows the calculation of the previous tax rate and the new tax rate:
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|
Previous Rate |
New Rate |
Federal rate |
34.00 |
% |
21.00 |
% |
State rate, net of federal tax benefit |
2.45 |
% |
3.13 |
% |
Total |
36.45 |
% |
24.13 |
% |
|
Summary of temporary differences |
At February 28, 2018 and November 30, 2017, respectively, the Company had temporary differences arising from the following:
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February 28, 2018 |
|
November 30, 2017 |
Type |
|
Amount |
|
Deferred Tax |
|
Amount |
|
Deferred Tax |
Depreciation |
|
$ |
(391,637 |
) |
|
$ |
(94,496 |
) |
|
$ |
(378,580 |
) |
|
$ |
(137,992 |
) |
Reserve for bad debts |
|
23,788 |
|
|
5,740 |
|
|
6,629 |
|
|
2,416 |
|
Reserve for returns |
|
209,300 |
|
|
50,501 |
|
|
246,513 |
|
|
89,854 |
|
Accrued returns |
|
96,114 |
|
|
23,191 |
|
|
109,646 |
|
|
39,966 |
|
Reserve for obsolete inventory |
|
145,797 |
|
|
35,178 |
|
|
158,269 |
|
|
57,689 |
|
Vacation accrual |
|
59,297 |
|
|
14,307 |
|
|
70,856 |
|
|
25,827 |
|
Alternative minimum tax carry forward |
|
— |
|
|
122,360 |
|
|
— |
|
|
122,360 |
|
Deferred compensation |
|
519,539 |
|
|
125,356 |
|
|
487,061 |
|
|
177,534 |
|
Bonus obligation unpaid |
|
400,166 |
|
|
96,554 |
|
|
400,166 |
|
|
145,861 |
|
Charitable contributions |
|
312,343 |
|
|
75,363 |
|
|
305,633 |
|
|
111,403 |
|
Section 263A costs |
|
57,296 |
|
|
13,825 |
|
|
48,317 |
|
|
17,612 |
|
Loss carry forward |
|
24,418,338 |
|
|
5,926,785 |
|
|
24,279,259 |
|
|
8,849,789 |
|
Net deferred tax asset |
|
$ |
25,850,341 |
|
|
$ |
6,394,664 |
|
|
$ |
25,733,769 |
|
|
$ |
9,502,319 |
|
|
Schedule of income tax expense |
Income tax expense (benefit) is made up of the following components:
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Three Months Ended |
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|
February 28, 2018 |
|
February 28, 2017 |
|
Current tax - Federal |
$ |
— |
|
|
$ |
11,000 |
|
|
Current tax - State & Local |
2,674 |
|
|
2,939 |
|
|
Deferred tax |
3,110,796 |
|
|
98,701 |
|
|
Total income tax expense |
$ |
3,113,470 |
|
|
$ |
112,640 |
|
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|
Schedule of prepaid and refundable income taxes |
Prepaid and refundable income taxes are made up of the following components:
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Prepaid and refundable income taxes |
|
Federal |
|
State & Local |
|
Total |
February 28, 2018 |
|
$ |
1,015 |
|
|
$ |
34,464 |
|
|
$ |
35,479 |
|
November 30, 2017 |
|
$ |
1,015 |
|
|
$ |
37,138 |
|
|
$ |
38,153 |
|
|
Provision for income taxes computed at the statutory rate |
A reconciliation of the provision for income taxes computed at the statutory rate to the effective rate for the three months ended February 28, 2018, and February 28, 2017 is as follows:
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Three Months Ended |
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Three Months Ended |
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|
February 28, 2018 |
|
February 28, 2017 |
|
|
Amount |
|
Percent of Pretax Income |
|
Amount |
|
Percent of Pretax Income |
Provision for income taxes at federal statutory rate |
|
$ |
(22,510 |
) |
|
21.00 |
% |
|
$ |
101,793 |
|
|
34.00 |
% |
Changes in provision for income taxes resulting from: |
|
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|
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|
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|
State income taxes, net of federal income tax benefit |
|
(3,355 |
) |
|
3.13 |
% |
|
7,335 |
|
|
2.45 |
% |
Change in tax rate related to future deferred tax benefits |
|
3,150,147 |
|
|
(2,938.87 |
)% |
|
— |
|
|
— |
% |
Non-deductible expenses and other adjustments |
|
(10,812 |
) |
|
10.09 |
% |
|
3,512 |
|
|
1.17 |
% |
Provision for income taxes at effective rate |
|
$ |
3,113,470 |
|
|
(2,904.65 |
)% |
|
$ |
112,640 |
|
|
37.62 |
% |
|