Note 6 - Income Taxes

12 Months Ended

Aug. 25, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

6.         INCOME TAXES

Income taxes consisted of the following:

	Years Ended
	August 25, 2013		August 26, 2012		August 28, 2011
Current:
Federal	$	-	$	-	$	-
State		12,229		23,224		19,457
		12,229		23,224		19,457
Deferred:
Federal		398,220		805,545		486,469
State		-		-		-
		398,220		805,545		486,469
Total	$	410,449	$	828,769	$	505,926

A reconciliation of the federal income tax provision at the statutory rate with actual taxes provided on earnings from continuing operations is as follows:

	Years Ended
	August 25, 2013			August 26, 2012			August 28, 2011
Ordinary federal income tax statutory rate		34.0	%		34.0	%		34.0	%
State income taxes net of federal tax effect		2.0			2.0			2.0
Effective rate		36.0	%		36.0	%		36.0	%

Deferred income taxes are provided for the temporary differences between the financial reporting and tax basis of the Company's assets and liabilities. Temporary differences and net operating loss carryforwards comprising the net deferred taxes on the balance sheet are as follows:

	August 25, 2013			August 26, 2012
Deferred Tax Assets
Accrued liabilities	$	71,460		$	81,093
Inventory valuation adjustments		30,546			33,669
Net operating loss carryforwards		932,528			849,709
Tax credit carryforwards		487,914			485,941
Stock option expense		209,651			195,361
Other		25,878			57,308
		1,757,977			1,703,081
Deferred Tax Liabilities
Tax depreciation and amortization greater than book		(2,962,140	)		(2,532,490	)
Net deferred taxes	$	(1,204,163	)	$	(829,409	)

Based on the long-term nature of its net operating loss carryforwards and the Company’s recent operating history and growth in prior years, management believes that it is more likely than not that the Company will be able to generate taxable income in the future sufficient to utilize these deductions and carryforwards, and accordingly no tax asset valuation allowance is deemed necessary.

As of August 25, 2013, the Company had federal net operating loss carryforwards of approximately $2.6 million expiring in 2021-2031. Also as of August 25, 2013, the Company had $454,000 in federal alternative minimum tax (AMT) credit carryforward that has no expiration. The AMT credits are available to offset future tax liabilities only to the extent that the Company has regular tax liabilities in excess of AMT tax liabilities.

The Company files a consolidated U.S. federal income tax return, as well as multiple state income tax returns. The federal and state income tax returns for the fiscal years 2010 – 2012 remain subject to examination. The Company classifies interest and penalties arising from unrecognized income tax positions in the statement of operations as general and administrative expenses if they occur.  At August 25, 2013 and August 26, 2012, the Company had no accrued interest or penalties related to uncertain tax positions.