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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

INCOME TAXES (Tables)

Current Taxes

Under current tax law in the PRC, the Company is and will be subject to the following enterprise income tax rates:

			Enterprise Income
	Year		Tax Rate
	2014		15%
	2015		15%
	2016		15%
	Thereafter		25%

Provision For Income Taxes

The provision for income taxes consisted of the following:

		Years Ended December 31,
		2013				2012
Current		$	-			$	1,414,171
Deferred			1,061,413				(430,250	)
Total income tax expense		$	1,061,413			$	983,921

Schedule of Income Tax Rate Reconciliation

Following is a reconciliation of income taxes calculated at the federal statutory rates to the provision for income taxes:

		Years Ended December 31,
		2013				2012
(Benefit) tax at statutory rate of 25%		$	(4,736,660	)		$	1,400,395
Stock based compensation from current and prior years			8,534				149,644
Effect of tax holiday			1,834,517				(655,947	)
Other, primarily the difference in U.S. tax rates			-				(70,471	)
Change in valuation allowance			3,955,022				160,300
Income tax expense		$	1,061,413			$	983,921

Schedule of Deferred Tax Assets and Liabilities

The temporary differences which give rise to the deferred income tax assets and liability are as follows:

		December 31,
		2013				2012
Deferred income tax assets:
Allowance for doubtful trade receivables		$	1,995,243			$	664,492
Allowance for doubtful other receivables			6,460				7,482
Inventory obsolescence reserve			1,501,687				265,498
Expenses not deductible in current year			31,143				30,200
Share based compensation			-				45,777
PRC net operating loss carry forward			328,643				-
U.S. net operating loss carry forward			1,052,784				905,669
Total deferred income tax assets			4,915,960				1,919,118
Valuation allowance			(4,915,960	)			(951,447	)
Net deferred income tax asset		$	-			$	967,671
Deferred income tax liability:
Intangible assets		$	176,414			$	95,963

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