INCOME TAXES

12 Months Ended

Apr. 30, 2014

INCOME TAXES [Text Block]

14. INCOME TAXES

FASB ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently.

FASB ASC 740 requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is $3,550,240 which is calculated by multiplying a 35% estimated tax rate by the cumulative net operating loss (NOL) adjusted for the following items:

For the period ended April 30,		2014			2013
Book loss for the year	$	(1,444,222	)	$	(1,319,011	)
Adjustments:
Impairment expenses		-			213,400
Allowance for doubtful accounts		-			14,041
Non-deductible stock compensation		571,972			-
Tax loss for the year	$	(872,250	)	$	(1,091,570	)
Estimated effective tax rate		35%			35%
Deferred tax asset	$	305,288		$	382,050

The total valuation allowance is $3,550,240. Details for the last two periods are as follows:

For the period ended April 30,		2014			2013
Deferred tax asset	$	3,550,240		$	3,244,953
Valuation allowance		(3,550,240	)		(3,244,953	)
Current taxes payable		-			-
Income tax expense	$	-		$	-

Below is a chart showing the estimated corporate federal net operating loss (NOL) and the year in which it will expire.

Year		Amount	Expiration
2014	$	872,250	2034
2013	$	1,091,570	2033