Note 6 - Income Taxes

12 Months Ended

Aug. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

6. INCOME TAXES

Income taxes consisted of the following:

	Years Ended
	August 31, 2014		August 25, 2013		August 26, 2012
Current:
Federal	$	-	$	-	$	-
State		22,616		12,229		23,224
		22,616		12,229		23,224
Deferred:
Federal		650,454		387,646		782,726
State		15,641		10,574		22,819
		666,095		398,220		805,545
Total	$	688,711	$	410,449	$	828,769

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 31, 2014			August 25, 2013			August 26, 2012
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 31, 2014			August 25, 2013
Deferred Tax Assets
Accrued liabilities	$	62,176		$	71,460
Inventory valuation adjustments		47,134			30,546
Net operating loss carryforwards		37,230			932,528
Tax credit carryforwards		326,138			487,914
Stock option expense		253,477			209,651
Other		5,607			25,878
		731,762			1,757,977
Deferred Tax Liabilities
Tax depreciation and amortization greater than book		(2,602,605	)		(2,962,140	)
Net deferred taxes	$	(1,870,843	)	$	(1,204,163	)

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 31, 2014, the Company had utilized all of its federal net operating loss carryforwards while it had state net operating loss carryforwards of approximately $380,000 expiring in 2016. Also as of August 31, 2014, the Company had $301,000 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 2011 – 2013 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 31, 2014 and August 25, 2013, the Company had no accrued interest or penalties related to uncertain tax positions.