Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 489

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 7A
Chunk 489
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 and Commercial Bank
of China Limited, China Merchants Bank Company Limited and Sichuan Rural Credit Union, which are not insured or otherwise protected. The
Company placed $10,075,162 and $72,223,894 with these institutions as of December 31, 2024 and 2023, respectively. The Company has not
experienced any losses in such accounts in the PRC.

Concentrations of credit risk
with respect to accounts receivable exists as the Company sells a substantial portion of its products to a limited number of customers.
However, such concentrations of credit risks are limited since the Company performs ongoing credit evaluations of its customers’
financial condition and extends credit terms as and when appropriate.

(h)      Inventories

Inventories are stated at the
lower of cost, determined on a first-in first-out cost basis, or net realizable value. Costs of work-in-progress and finished goods comprise
direct materials, direct labor and an attributable portion of manufacturing overhead. Net realizable value is based on estimated selling
price less costs to complete and selling expenses.

(i)      Advances to suppliers, net

Advances to suppliers are stated at the original amount less
an allowance for doubtful account.

Advances to supplier primarily consists of prepayments for
purchase of cryptocurrency mining machines and standardized computing equipment. The Company reviews its advance to suppliers on a periodic
basis and determines the adequacy of provision when amounts outstanding are not likely to be collected in cash or utilized against receive
of products. An allowance for doubtful is recorded in the period in which the Company cash collection or receipts of products is remote.

    F-10 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

DECEMBER 31, 2024

(Expressed in U.S. dollars)

NOTE 1 – BASIS OF PRESENTATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

(j)      Property, Plant and Equipment

Property, plant and equipment
are stated at cost less accumulated depreciation and any impairment losses. Expenditures for new facilities or equipment, and major expenditures
for betterment of existing facilities or equipment are capitalized and depreciated, when available for intended use, using the straight-line
method at rates sufficient to depreciate such costs less 5% residual value over the estimated productive lives. All other ordinary repair
and maintenance costs are exp