Company: QSJC
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001683168-25-001892
Chunk: 122

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 122
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185).

The cash used in operating assets and liabilities
was generally attributable to (i) increase in inventories of $(87,122) due to the purchase of new products near the fiscal year end; (ii)
increase in advance to suppliers of $(60,101) related to the prepayment made for the consultancy services to be rendered in fiscal year
2025.; (iii) decrease in accounts payables of $(89,381) due to the scale down of vendors’ balances; and (iv) decrease in advance
from customers of $(89,017) due to fewer unfulfilled sales orders.

Investing Activities

No cash movement on investing activities for the
year ended December 31, 2024.

Financing Activities

Net cash generated from financing activities was
$281,985 for the year ended December 31, 2024, which was attributable to the funds from related parties to support our business operations.

Inflation

Inflation and changing prices have not had a material
effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable
future. However, our management will closely monitor price changes in our industry and continually maintain effective cost control in
operations.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue
or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.

 29 

Critical Accounting Policies and Estimates

Revenue Recognition

The Company’s revenue recognition policy
is compliant with ASC 606, Revenue from Contracts with Customers that revenue is recognized when a customer obtains control of promised
goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods.
In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts
with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for
those goods. The Company applies the following five-step model in order to determine this amount:

    (i)
    identification of the goods and services in the contract;

    (ii)
    determination of whether the goods and services are performance obligations, including whether they are distinct in the context of the contract;

    (iii)
    measurement of the transaction price, including the constraint on variable consideration