7. Provision for Income Taxes

12 Months Ended

Aug. 31, 2015

Income Tax Disclosure [Abstract]

7. Provision for Income Taxes

The company utilizes FASB ASC 740, “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company generated a deferred tax credit through net operating loss carry forwards. As of August 31, 2015 the Company had federal and state net operating loss carry forwards of approximately $777,000 ($644,000 in 2014) that can be used to offset future taxable income. The carry forwards will begin to expire in 2014 unless utilized in earlier years.

The income tax effect of temporary differences between financial and tax reporting gives rise to the deferred tax asset at August 31, 2014 and 2013 as follows:

	August 31, 2015			August 31, 2014
Net operating losses	$	334,000		$	277,000
Less: valuation allowance		(334,000	)		(277,000	)
Net deferred tax assets	$	–		$	–