Income Taxes

12 Months Ended

Jun. 30, 2013

Income Taxes

Income Taxes

6. Income Taxes The following are the components of income taxes:

Years ended June 30,	2013		2012
Current
Federal	$	811,960	$	248,257
State		138,990		42,497
		950,950		290,754
Deferred
Federal		24,270		21,988
State		4,156		3,764
		28,426		25,752
	$	979,376	$	316,506

The reconciliation of income tax expense computed at the Federal statutory tax rate of 34% to the provision for income taxes is as follows:

Years ended June 30,	2013			2012
Tax at the statutory rate	$	879,449		$	281,586
State income taxes, net of federal benefit		93,894			30,064
Other		6,033			4,856
	$	979,376		$	316,506
Effective tax rate		37.9	%		38.2	%

Deferred income taxes reflect the net tax effect of temporary differences between the bases of assets and liabilities for financial reporting purposes and the bases used for income tax purposes.  Significant components of the Company’s current and noncurrent deferred tax assets and liabilities are as follows:

Years ended June 30,	2013		2012
Current deferred tax assets:
Allowance for doubtful accounts	$	58,327	$	58,327
Inventory capitalization		21,063		34,234
Inventory reserves		19,436		26,902
		98,826		119,463
Noncurrent deferred tax assets (liabilities):
Equipment and improvements		4,613		(1,890	)
Franchise, trademarks and other intangible assets		14,661		28,953
		19,274		27,063
Total net deferred income tax assets	$	118,100	$	146,526

As of June 30, 2013, the Company was subject to potential Federal and State tax examinations for the tax years 2009 through 2012.