Entity information:
NOTE 5 INCOME TAXES

 

The income tax positions taken for open years are appropriately stated and supported for all open years. The Company’s federal tax returns for the years ended June 30, 2016, 2015, and 2014 are subject to examination by the IRS taxing authority.

 

The sources of deferred income tax assets and liability at June 30, 2017 and 2016 are as follows:

 

    2017     2016  
Deferred Income Tax Assets:                
Net Operating Loss Carryover   $ 83,694     $ -  
Trade Receivables     5,251       6,310  
Deferred Income     3,837       4,332  
Inventories     952       1,223  
Contribution Carryover     572       -  
Total Deferred Income Tax Assets     94,306       11,865  
                 
Deferred Income Tax Liability:                
Property and Equipment     (67,143 )     (94,778 )
NET DEFERRED INCOME TAX ASSET (LIABILITY)   $ 27,163     $ (82,913 )

 

The net deferred income tax asset (liability) is presented in the accompanying June 30, 2017 and 2016 consolidated balance sheets as follows:

 

    2017     2016  
Current Deferred Income Tax Asset   $ 90,469     $ 7,533  
Noncurrent Deferred Income Tax Liability     (63,306 )     (90,446 )
NET DEFERRED INCOME TAX ASSET (LIABILITY)   $ 27,163     $ (82,913 )

 

The provision (benefit) for income taxes for the years ended June 30, 2017 and 2016 consists of the following:

 

    2017     2016  
Current Income Tax Expense (Credit)   $ (35 )   $ 11,138  
Deferred Income Tax Credit     (110,076 )     (8,665 )
    $ (110,111 )   $ 2,473  

 

 

The income tax provision differs from the amount of income tax determined by applying the statutory federal income tax rate to pretax income for the years ended June 30, 2017 and 2016 due to the following:

 

    2017     2016  
Computed at Federal Statutory Rate of 34%   $ (98,278 )   $ 12,309  
Increase (Decrease) in Income Taxes Resulting from:                
Non-Deductible Expenses     111       630  
Federal Tax Adjustment Due to Actual Rate vs. Statutory Rate     -       (9,730 )
Domestic Production Activities Deduction Credit     -       (1,767 )
Other     (36 )     (27 )
State Income Taxes     (11,908 )     1,058  
    $ (110,111 )   $ 2,473  

 

The Company has available at June 30, 2017, $219,526 of unused operating loss that may be carried back two years to offset prior taxable income or carried forward and applied against future taxable income. The carryforward expires on June 30, 2038.