Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Income Tax Disclosure [Text Block]

3—Income Taxes—The provision for income tax expense consists of the following:

	2011	2010
Current:
Federal………………………………………………………….	$  585,000	$    239,000
State…………………………………………………………….	12,000	3,000
Deferred………………………………………………………….	14,000	46,000
	$  611,000	$  288,000

The following is a reconciliation of the statutory federal income tax rate to the actual effective tax rate:

	2011		2010
	Amount	%	Amount	%
Expected tax at U.S. Statutory rate…………	$  634,000	34.0	$  304,000	34.0
Permanent differences………………………	(31,000)	(1.7)	(18,000)	(2.0)
State taxes, net of federal benefit………….	8,000	.4	2,000	.2
Income tax expense…………………………	$  611,000	32.7	$  288,000	32.2

The Company’s effective tax rates were lower than the U.S. federal statutory rate in 2011 and 2010 primarily due to the Domestic Production Activities Deduction allowed under Internal Revenue Code Section 199.

The deferred tax liabilities and assets consist of the following:

	2011	2010
Depreciation and amortization………………………………..	$  (785,275)	$  (745,275)
Inventory………………………………………………………..	285,516	259,549
Accrued vacation………………………………………………	88,045	89,150
Allowance for doubtful accounts……………………………..	48,000	46,275
Other, net……………………………………………………….	(1,370)	(783)
	420,191	394,191
	$  (365,084)	$  (351,084)

Valuation allowances related to deferred taxes are recorded based on the “more likely than not” realization criteria.  The Company reviews the need for a valuation allowance on a quarterly basis for each of its tax jurisdictions.  A deferred tax valuation allowance was not required at December 31, 2011 or 2010.