Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 488

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 7A
Chunk 488
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, determination
of impairment losses, assessment of market value of inventories and provision for inventory obsolescence, allowance for doubtful accounts,
recognition and measurement of deferred income taxes, valuation allowance for deferred tax assets, and assumptions used for the valuation
of share based payments. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.

    F-9 

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

(e)      Cash and Cash Equivalents

Cash and cash equivalents consist
of all cash balances and highly liquid investments with original maturities of three months or less. Because of short maturity of these
investments, the carrying amounts approximate their fair values.

(f)      Accounts receivable and Allowance for Doubtful Accounts

Accounts receivable is stated
at cost, net of allowance for doubtful accounts. The normal credit term extended to customers ranges between 90 and 240 days. The company
reviews all receivables 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