INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

INCOME TAXES

Schedule of components of income tax expense

	2016		2015
Current:
Federal	$	(72,000)	$	62,000
State		7,000		10,000
		(65,000)		72,000
Deferred  -  Federal		61,000		18,000
	$	(4,000)	$	90,000

Schedule of expected provision for income taxes, computed by applying the U.S. federal income tax rate to income before taxes, reconciled to income tax expense

	2016		2015
Expected provision for federal income taxes	$	(23,000)	$	77,000
State income taxes, net of federal benefit		7,000		7,000
Domestic manufacturers deduction		-		(6,000)
Non-deductible meals, entertainment, and life insurance		27,000		29,000
Research and development credit		(32,000)		(30,000)
Change in valuation allowance		15,000		15,000
Other		2,000		(2,000)
	$	(4,000)	$	90,000

Schedule of components of net deferred tax liabilities

	2016		2015
Deferred tax liabilities:
Accrued vacation	$	32,000	$	26,000
Inventories reserve		66,000		126,000
Allowance for doubtful accounts		4,000		5,000
Allowance for sales returns		15,000		37,000
Research and development credit carryforward		77,000		45,000
Accrued self-insured medical		3,000		1,000
Property and equipment		(499,000)		(494,000)
Intangible assets		(92,000)		(86,000)
Net operating loss		3,000		-
Other		5,000		-
Valuation allowance		(60,000)		(45,000)
Net deferred tax liabilities	$	(446,000)	$	(385,000)