Income taxes on continuing operations at July 31 include the following:
| 2017 | 2016 | |||||||
| Currently payable | $ | - | $ | - | ||||
| Deferred | - | - | ||||||
| Total | $ | - | $ | - | ||||
A reconciliation of the effective tax rate with the statutory U.S. income tax rate at July 31 is as follows:
| 2017 | 2016 | |||||||||||||||
| % of | % of | |||||||||||||||
| Pretax | Pretax | |||||||||||||||
| Income | Amount | Income | Amount | |||||||||||||
| Income taxes per statement of operations | $ | - | - | % | $ | - | - | % | ||||||||
| Loss for financial reporting purposes without tax expense or benefit | (13,400 | ) | (34 | ) | (9,400 | ) | (34 | ) | ||||||||
| Income taxes at statutory rate | $ | (13,400 | ) | (34 | )% | $ | (9,400 | ) | (34 | )% | ||||||
The components of and changes in the net deferred taxes were as follows:
Deferred tax assets:
| 2017 | 2016 | |||||||
| Net operating loss carryforwards | $ | 181,400 | $ | 167,700 | ||||
| Allowances for uncollectable accounts | 8,800 | 8,600 | ||||||
| Compensation and miscellaneous | 5,300 | 5,300 | ||||||
| Deferred tax assets | 195,500 | 181,600 | ||||||
| Valuation Allowance | (195,500 | ) | (181,600 | ) | ||||
| Net deferred tax assets: | $ | - | $ | - | ||||
Deferred taxes are provided for temporary differences in deducting expenses for financial statement and tax purposes. The principal source for deferred tax assets are net operating loss carryforwards and accrued compensation. No deferred taxes are reflected in the balance sheet at July 31, 2017 or 2016 due to a valuation allowance, which increased by $13,900 and $2,900 in 2017 and 2016, respectively.
The Company has incurred losses that can be carried forward to offset future earnings if conditions of the Internal Revenue Code are met. These losses are as follows:
| Year of Loss | Amount | Expiration Date | |||
| Period Ended July 31, 2008 | $ | 62,107 | 2/28/2029 | ||
| Period Ended July 31, 2009 | $ | 68,766 | 2/28/2030 | ||
| Period Ended July 31, 2010 | $ | 25,311 | 2/28/2031 | ||
| Period Ended July 31, 2011 | $ | 96,481 | 2/28/2032 | ||
| Period Ended July 31, 2012 | $ | 113,260 | 2/28/2033 | ||
| Period Ended July 31, 2014 | $ | 29,399 | 2/28/2035 | ||
| Period Ended July 31, 2015 | $ | 33,483 | 2/28/2036 | ||
| Period Ended July 31, 2016 | $ | 50,290 | 2/28/2037 | ||
| Period Ended July 31, 2017 | $ | 39,301 | 2/28/2038 | ||
Tax periods ended July 31, 2013 through 2017 are subject to examination by major taxing authorities.
There are no interest or tax penalty expenses reflected in the Balance Sheets or Statements of Operations.