PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2014

Property and equipment consisted of the following:

	September 30,			December 31,
	2014			2013
Permit of land use	$	457,743		$	460,964
Building		10,033,988			2,494,623
Plant, machinery and equipment		16,393,856			6,671,620
Motor vehicle		150,611			151,670
Office equipment		246,553			229,210
Construction in progress		12,537,905			25,497,600
Total		39,820,656			35,505,687
Less: accumulated depreciation		(5,951,165	)		(5,264,350	)
Property and Equipment, net	$	33,869,491		$	30,241,337

A reconciliation of total interest cost incurred to interest expense

A reconciliation of total interest cost incurred to interest expense as recognized in the consolidated statement of operations is as follows:

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2014		2013		2014		2013
Total interest cost incurred	$	330,995	$	89,238	$	952,836	$	263,732
Interest cost capitalized		5,751		-		457,782		-
Interest expense	$	325,244	$	89,238	$	495,054	$	263,732

Useful lives of the assets

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Asset		Life - years
Permit of land use		40 - 70
Building		20 - 49
Plant, machinery and equipment		10
Motor vehicle		5 - 10
Office equipment		3-5

For the three months ended September 30, 2014 and 2013, depreciation expense was $321,020 and $210,182. For the nine months ended September 30, 2014 and 2013, depreciation expense was $724,509 and $640,550.