Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 392

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 6
Chunk 392
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 that exceed the term. The Company establishes an allowance for doubtful accounts based on management’s assessment
of the collectability of trade and other receivables. A considerable amount of judgment is required in assessing the amount of allowance
and the Company considers the historical level of credit losses. The Company makes judgments about the credit worthiness of each customer
based on ongoing credit evaluations, and monitors current economic trends that might impact the level of credit losses in the future.
If the financial condition of the customer begins to deteriorate, resulting in their inability to make payments within credit term provided,
an allowance may be required.

As of December 31, 2024 and December
31, 2023, the provision for doubtful debts was $29,711 and $25,060. The provision for doubtful accounts in the consolidated statements
of comprehensive (loss) income for the years ended December 31, 2024 is $5,069.

(g)      Concentration of Credit Risk

The Company is exposed to credit
risk in the normal course of business, primarily related to accounts receivable and cash and cash equivalents. Substantially all of the
Company’s cash and cash equivalents are maintained with financial institutions in the PRC, namely, Industrial 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