Attached files
file | filename |
---|---|
8-K/A - Regal Life Concepts, Inc. | v193168_8ka.htm |
EX-2.1 - Regal Life Concepts, Inc. | v193168_ex2-1.htm |
EX-14.1 - Regal Life Concepts, Inc. | v193168_ex14-1.htm |
EX-99.1 - Regal Life Concepts, Inc. | v193168_ex99-1.htm |
EX-99.3 - Regal Life Concepts, Inc. | v193168_ex99-3.htm |
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
CONDENSED
FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010
(Stated
in US Dollars)
SHENZHEN RUI PU DA
ELECTRONIC TECHNOLOGY CO. LTD.
INDEX TO CONDENSED FINANCIAL
STATEMENTS
CONTENTS
Page(s)
|
|
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING
FIRM
|
2
|
CONDENSED
BALANCE SHEETS
|
3
|
CONDENSED
STATEMENT OF INCOME AND COMPREHENSIVE INCOME
|
4
|
STATEMENT
OF CASH FLOWS
|
5
|
NOTES
TO CONDENSED FINANCIAL STATEMENTS
|
6-15
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
AUDIT
OF FINANCIAL STATEMENTS
To the
Board of Directors and Stockholders of Shenzhen Rui Pu Da Electronic Technology
Co., Ltd
We have
reviewed the accompanying balance sheets of Shenzhen Rui Pu Da
Electronic Technology Co., Ltd ("the Company") as of June 30, 2010 and December
31, 2009, and the statements of income and comprehensive income and cash flows
for the six months ended June 30, 2010 and 2009. The financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statements based on
our review.
We
conducted our review in accordance with auditing standards generally accepted in
the Public Company Accounting Oversight Board in the United States of America. A
review is substantially less in scope than an examination, the objective of
which is the expression of an opinion on management's assumptions, the
adjustments and the application of those adjustments to historical financial
information. Accordingly, we do not express such an opinion
Based on
our review, nothing came to our attention that caused us to believe that
management's assumptions do not provide a reasonable basis for presenting the
financial statements for the six months ended June 30, 2010 and
2009.
Parker
Randall CF (H.K.) CPA Limited
Certified
Public Accountants
Hong
Kong
30 July
2010
2
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
CONDENSED
BALANCE SHEETS
AS
OF JUNE 30, 2010 AND DECEMBER 31, 2009
(Stated
in US Dollars)
As of
|
As of
|
||||||||||
June 30,
|
December 31,
|
||||||||||
Notes
|
2010
|
2009
|
|||||||||
$
|
$
|
||||||||||
ASSETS
|
|||||||||||
Current
assets
|
|||||||||||
Cash
and cash equivalents
|
- | 14 | |||||||||
Accounts
receivable, net
|
3
|
- | - | ||||||||
Inventories
|
4
|
- | - | ||||||||
TOTAL
ASSETS
|
- | 14 | |||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||||||
Total
current liabilities
|
- | - | |||||||||
STOCKHOLDERS'
EQUITY
|
|||||||||||
Registered
and paid-in capital
|
3
|
62,373 | 62,373 | ||||||||
Accumulated
losses
|
(68,626 | ) | (68,612 | ) | |||||||
Accumulated
other comprehensive income
|
6,253 | 6,253 | |||||||||
Total
stockholders' equity
|
- | 14 | |||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
- | 14 |
See
accompanying notes to the financial statements
3
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
CONDENSED
STATEMENT OF INCOME AND COMPREHENSIVE INCOME
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
For the six
|
For the six
|
||||||||||
months ended
|
months ended
|
||||||||||
Notes
|
June 30, 2010
|
June 30, 2009
|
|||||||||
$
|
$
|
||||||||||
Sales
|
- | - | |||||||||
Less:
Sales Tax
|
- | - | |||||||||
Net
sales
|
- | - | |||||||||
Cost
of sales
|
- | - | |||||||||
Gross
profit
|
- | - | |||||||||
Selling,
general and administrative expenses
|
7
|
(14 | ) | (3,273 | ) | ||||||
Operating
loss
|
(14 | ) | (3,273 | ) | |||||||
Non
Operating loss
|
- | 4,390 | |||||||||
Non-operating
income
|
- | (2,691 | ) | ||||||||
Loss
before income taxes
|
(14 | ) | (1,574 | ) | |||||||
Income
taxes
|
8
|
- | - | ||||||||
Net
loss
|
(14 | ) | (1,574 | ) | |||||||
Other
comprehensive income
|
|||||||||||
Foreign
currency translation gain
|
- | - | |||||||||
Comprehensive
loss
|
(14 | ) | (1,574 | ) |
See
accompanying notes to the financial statements
4
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
CONDENSED
STATEMENT OF CASH FLOWS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
For the six
|
For the six
|
|||||||
months ended
|
months ended
|
|||||||
June 30, 2010
|
June 30, 2009
|
|||||||
$
|
$
|
|||||||
Cash
flows (used in)/provided by operating activities
|
||||||||
Net
loss
|
(14 | ) | (1,574 | ) | ||||
Changes
in assets and liabilities
|
||||||||
Decrease
in accounts receivable
|
- | 4,390 | ||||||
Increase
in accrued liabilities
|
- | (351 | ) | |||||
Net
cash (used in)/provided by operating activities and net
(decrease)/increase in cash and cash equivalents
|
(14 | ) | 2,465 | |||||
Effect
of foreign currency translation on cash and cash
equivalents
|
- | 1 | ||||||
Cash
and cash equivalents at beginning of year
|
14 | 1,511 | ||||||
Cash
and cash equivalents at end of year
|
- | 3,977 |
See
accompanying notes to the financial statements
5
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
1.
|
ORGANIZATION
AND PRINCIPAL ACTIVITIES
|
Shenzhen
Rui Pu Da Electronic Technology Co., Limited. (the “Company” or “Rui Pu Da”) was
incorporated in the People's Republic of China ("PRC") on April 14, 2006, with
the principal business of development and distribution of electronic products
within PRC.
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
(a)
|
Method
of Accounting
|
The
Company maintains its general ledger and journals with the accrual method
accounting for financial reporting purposes. The financial statements and notes
are representations of management. Accounting policies adopted by the Company
conform to generally accepted accounting principles in the United States of
America and have been consistently applied in the presentation of financial
statements, which are compiled on the accrual basis of accounting.
(b)
|
Basis
of Presentation
|
The
Company's financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America ("US
GAAP").
This
basis of accounting differs in certain material respects from that used for the
preparation of the books of account of the Company, which are prepared in
accordance with the accounting principles and the relevant financial regulations
applicable to enterprises with limited liabilities established in the PRC ("PRC
GAAP"), the accounting standards used in the places of their domicile. The
accompanying financial statements reflect necessary adjustments not recorded in
the books of account of the Company to present them in conformity with US
GAAP.
(c)
|
Economic
and Political risks
|
The
Company's operations are conducted in the PRC. These include risks associated
with, among others, the political, economic and legal environment and foreign
currency exchange. The Company's results may be adversely affected by changes in
the political and social conditions in the PRC, and by changes in governmental
policies with respect to laws and regulations, anti-inflationary measures,
currency conversion, remittances abroad, and rates and methods of taxation,
among other things.
6
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
(d)
|
Use
of Estimates
|
In
preparing of the financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the dates of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting periods. These accounts and estimates include, but are not limited to,
the valuation of accounts receivable, inventories, deferred income taxes and the
estimation on useful lives of plant and machinery. Actual results could differ
from those estimates.
(e)
|
Cash
and Cash Equivalents
|
The
Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. The Company maintains
bank accounts only in the PRC. The Company does not maintain any bank accounts
in the United States of America. As of June 30, 2010 and December 31, 2009,
there were cash and cash equivalents of $0 and $14 respectively.
(f)
|
Accounts
Receivable
|
Accounts
receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less allowance for
impairment. An allowance for impairment of trade and other receivables is
established when there is objective evidence that the Company will not be able
to collect all amounts due according to the original terms of receivables. The
amount of the allowance is the difference between the receivables’ carrying
amount and the present value of estimated future cash flows, discounted at the
effective interest rate computed at initial recognition. The amount of the
allowance is recognised in the income statement.
(g)
|
Inventories
|
Inventories
are stated at the lower of cost and net realisable value. Cost is determined
using the first-in, first-out basis. The cost of inventories, principally
comprising purchase cost and other costs incurred in bringing the inventories to
their present location and condition. Net realisable value is the estimated
selling price in the ordinary course of business, less the estimated costs of
completion and the estimated costs necessary to make the sale.
7
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
(h)
|
Foreign
Currency Translation
|
The
Company maintains its financial statements in the functional currency. The
functional currency of the Company is the Renminbi (RMB). Monetary assets and
liabilities denominated in currencies other than the functional currency are
translated into the functional currency at rates of exchange prevailing at the
balance sheet dates. Transactions denominated in currencies other than the
functional currency are translated into the functional currency at the exchanges
rates prevailing at the dates of the transaction. Exchange gains or losses
arising from foreign currency transactions are included in the determination of
net income for the respective periods.
For
financial reporting purposes, the financial statements of the Company which are
prepared using the functional currency have been translated into United States
dollars. Assets and liabilities are translated at the exchange rates at the
balance sheet dates and revenue and expenses are translated at the average
exchange rates and stockholders’ equity is translated at historical exchange
rates. Any translation adjustments resulting are not included in determining net
income but are included in foreign exchange adjustment to other comprehensive
income, a component of stockholders’ equity.
June 30,
|
June 30,
|
|||||||
2010
|
2009
|
|||||||
Period
end US$ : RMB exchange rate
|
6.79010 | 6.83190 | ||||||
Average
periodic US$ : RMB exchange rate
|
6.80910 | 6.83430 |
RMB is
not freely convertible into foreign currency and all foreign exchange
transactions must take place through authorized institutions. No representation
is made that the RMB amounts could have been, or could be, converted into US$ at
the rates used in translation.
(i)
|
Revenue
Recognition
|
Revenue
represents the invoiced value of goods sold recognized upon the delivery of
goods to customers. Revenue is recognized when all of the following criteria are
met:
-
|
Persuasive
evidence of an arrangement exists;
|
-
|
Delivery
has occurred or services have been
rendered;
|
-
|
The
seller's price to the buyer is fixed or determinable;
and
|
-
|
Collectability
is reasonably assured. Payments have been
established.
|
(j)
|
Cost
of Revenue
|
Regarding
the trading of electronic products, the respective cost of revenue consists
primarily of material cost, labour cost, overhead associated with the
manufacturing process and related expenses which are directly attributable to
the trading.
8
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
(k)
|
Income
Taxes
|
Income
taxes are accounted for under the asset and liability method. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry-forwards. Deferred tax assets are reduced by a
valuation allowance to the extent management concludes it is more likely than
not that the assets will not be realized. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in the statements of income and comprehensive income in the
periods that includes the enactment date.
(l)
|
Comprehensive
Income
|
Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, all
items that are required to be recognized under current accounting standards as
components of comprehensive income are required to be reported in a financial
statement that is presented with the same prominence as other financial
statements. The Company’s current components of other comprehensive income are
the foreign currency translation adjustment.
(m)
|
Recent
Accounting Pronouncements
|
In March
2008, the FASB issued SFAS No. 161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVITIES (an amendment to SFAS No. 133). This statement is effective
for financial statements issued for fiscal year and interim periods beginning
after November 15, 2008 and requires enhanced disclosures with respect to
derivative and hedging activities. The Group will comply with the disclosure
requirements of this statement if it utilizes derivative instruments or engages
in hedging activities upon its effectiveness.
In April
2008, the FASB issued FASB Staff Position No. 142-3, DETERMINATION OF THE USEFUL
LIFE OF INTANGIBLE ASSETS (“FSP No. 142-3”) to improve the consistency between
the useful life of a recognized intangible asset (under SFAS No. 142) and the
period of expected cash flows used to measure the fair value of the intangible
asset (under SFAS No. 141(R)). FSP No. 142-3 amends the factors to be considered
when developing renewal or extension assumptions that are used to estimate an
intangible asset’s useful life under SFAS No. 142. The guidance in the new staff
position is to be applied prospectively to intangible assets acquired after
December 31, 2008. In addition, FSP No.142-3 increases the disclosure
requirements related to renewal or extension assumptions. The Company does not
believe implementation of FSP No. 142-3 have a material impact on its financial
statements.
9
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
(m)
|
Recent
Accounting Pronouncements
(Continued)
|
In May
2008, the FASB issued statement No. 162, THE HIERARCHY OF GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES. This statement identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy). This statement is effective 60 days
following the SEC’s approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, “the Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles”.
In May
2008, the FASB issued FSP Accounting Principles Board (“APB”) 14-1 “Accounting
for Convertible Debt instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)” (“FSP APB 14-1”). FSP APB 14-1 requires the
issuer of certain convertible debt instruments that may be settled in cash (or
other assets) on conversion to separately account for the liability (debt) and
equity (conversion option) components of the instrument in a manner that
reflects the issuer’s non-convertible debt borrowing rate. FSP APB 14-1 is
effective for fiscal years beginning after December 15, 2008 on a retroactive
basis. As we do not have convertible debt at this time, we currently believe the
adoption of FSP APB 14-1 will have no effect on our combined results of
operations and financial condition.
In May
2008, the FASB issued Statement No. 163, ACCOUNTING FOR FINANCE GUARANTEE
INSURANCE CONTRACTS - AN INTERPRETATION OF FASB STATEMENT NO. 60. The premium
revenue recognition approach for a financial guarantee insurance contract links
premium revenue recognition to the amount of insurance protection and the period
in which it is provided. For purposes of this statement, the amount of insurance
protection provided is assumed to be a function of the insured principal amount
outstanding, since the premium received requires the insurance enterprise to
stand ready to protect holders of an insured financial obligation from loss due
to default over the period of the insured financial obligation. This Statement
is effective for financial statements issued for fiscal years beginning after
December 15, 2008.
In June
2008, the FASB issued FASB Staff Position Emerging Issues Task Force (EITF) No.
03-6-1, DETERMINING WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT
TRANSACTIONS ARE PARTICIPATING SECURITIES (“FSP EITF No. 03-6-1”). Under FSP
EITF No. 03-6-1, unvested share-based payment awards that contain rights to
receive nonforfeitable dividends (whether paid or unpaid) are participating
securities, and should be included in the two-class method of computing EPS. FSP
EITF No. 03-6-1 is effective for fiscal years beginning after December 15, 2008,
and interim periods within those years, and is not expected to have a
significant impact on the financial statements.
10
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
(m)
|
Recent
Accounting Pronouncements
(Continued)
|
In April
2009, the FASB issued FSP 157-4, DETERMINING FAIR VALUE WHEN THE VOLUME AND
LEVEL OF ACTIVITY FOR THE ASSET OR LIABILITY HAVE SIGNIFICANTLY DECREASED AND
IDENTIFYING TRANSACTIONS THAT ARE NOT ORDERLY (“FSP 157-4”). FSP 157-4 provides
additional guidance for estimating fair value in accordance with SFAS 157 when
the volume and level of activity for the asset or liability have significantly
decreased. FSP 157-4 also includes guidance on identifying circumstances that
indicate a transaction is not orderly. FSP 157-4 is effective for interim and
annual reporting periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. FSP 157-4 does not require
disclosures for earlier periods presented for comparative purposes at initial
adoption. In periods after initial adoption, FSP 157-4 requires comparative
disclosures only for periods ending after initial adoption. The adoption of the
provisions of FSP 157-4 is not anticipated to materially impact on the Company’s
results of operations or the fair values of its assets and
liabilities.
In May
2009, the FASB issued FSP SFAS 165 “Subsequent Events”. The objective of this
Statement is to establish general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued. SFAS 165 is effective for the interim
and annual periods ending after June 15, 2009, which is now codified as FASB ASC
855 “Subsequent Events”. The adoption of FASB ASC 855 did not have a material
impact on the Company’s financial position, results of operations and cash
flows. Effective February 24, 2010, the Company adopted Accounting Standards
Update (“ASU”) No. 2010-09, “Subsequent Events (Topic 855): Amendments to
Certain Recognition and Disclosure Requirements”, which removes the requirement
to disclose the date through which subsequent events have been evaluated. The
adoption of the ASU did not have a material impact on the Company’s financial
position, results of operations and cash flows.
In June
2009, the FASB issued SFAS No. 166 ACCOUNTING FOR TRANSFERS OF FINANCIAL ASSETS
(“SFAS 166). This statement is intended to improve the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial reports about a transfer of financial
assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor’s continuing involvement in
transferred financial assets. This Statement must be applied as of the beginning
of each reporting entity’s first annual reporting period that begins after
November 15, 2009, and is required to be adopted by the Company in the first
quarter of fiscal year 2011. Earlier application is prohibited. This Statement
must be applied to transfers occurring on or after the effective date. The
Company does not expect the adoption of SFAS 166 to have a material impact on
the Company’s financial position, results of operations and cash
flows.
11
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
(m)
|
Recent
Accounting Pronouncements
(Continued)
|
In June
2009, the FASB issued SFAS No.167, “Amendments to FASB Interpretation No.46(R)”,
which is codified as ASC 810. ASC 810 amends FASB Interpretation No.46(R),
“Variable Interest Entities” for determining whether an entity is a variable
interest entity (“VIE”) and requires an enterprise to perform an analysis to
determine whether the enterprise’s variable interest or interests give it a
controlling financial interest in a VIE. Under ASC 810, an enterprise has a
controlling financial interest when it has a) the power to direct the activities
of a VIE that most significantly impact the entity’s economic performance and b)
the obligation to absorb losses of the entity or the right to receive benefits
from the entity that could potentially be significant to the VIE. ASC 810 also
requires an enterprise to assess whether it has an implicit financial
responsibility to ensure that a VIE operates as designed when determining
whether it has power to direct the activities of the VIE that most significantly
impact the entity’s economic performance.
ASC 810
also requires ongoing assessments of whether an enterprise is the primary
beneficiary of a VIE, requires enhanced disclosures and eliminates the scope
exclusion for qualifying special-purpose entities. ASC 810 shall be effective as
of the beginning of each reporting entity’s first annual reporting period that
begins after November 15, 2009, for interim periods within that first annual
reporting period, and for interim and annual reporting periods thereafter.
Earlier application is prohibited. ASC 810 is effective for the Company in the
first quarter of fiscal 2011. The Company is currently evaluating the effect of
ASC 810 on its financial statements and results of operation and is currently
not yet in a position to determine such effects.
In June
2009, the FASB issued SFAS 168, “The FASB Accounting Standards CodificationTM
and the Hierarchy of Generally Accepted Accounting Principles - a replacement of
FASB Statement No 162”, which supersedes all existing non-SEC accounting and
reporting standards. The codification does not change GAAP but rather organizes
it into a new hierarchy with two levels: authoritative and non-authoritative.
All authoritative GAAP carries equal weight and is organized in a topical
structure. The adoption of SFAS 168 did not have a material impact on the
Company’s financial position, results of operations and cash
flows.
12
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
(m)
|
Recent
Accounting Pronouncements
(Continued)
|
In August
2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05,
“Measuring Liabilities at Fair Value”, which is codified as ASC 820, “Fair Value
Measurements and Disclosures”. This Update provides amendments to ASC 820-10,
Fair Value Measurements and Disclosures –Overall, for the fair value measurement
of liabilities. This Update provides clarification that in circumstances in
which a quoted price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using a
valuation technique that uses the quoted price of the identical liability when
traded as an asset, quoted prices for similar liabilities or similar liabilities
when traded as assets, or that is consistent with the principles of ASC 820. The
amendments in this Update also clarify that when estimating the fair value of a
liability, a reporting entity is not required to include a separate input or
adjustment to other inputs relating to the existence of a restriction that
prevents transfer of the liability.
The
amendments in this Update also clarify that both a quoted price in an active
market for the identical liability at the measurement date and the quoted price
for the identical liability when traded as an asset in an active market when no
adjustments to the quoted price of the assets are required are Level 1 fair
value measurements. ASC 820 is effective for the first reporting period
(including interim periods) beginning after August 28, 2009. The adoption of
this Update did not have a significant impact to the Company’s financial
statements.
In
September 2009, the FASB issued ASU No. 2009-06, “Income Taxes (Topic
740)—Implementation Guidance on Accounting for Uncertainty in Income Taxes and
Disclosure Amendments for Nonpublic Entities”, and it provides implementation
guidance on accounting for uncertainty in income taxes effective for interim and
annual reporting period ending on or after September 15, 2009. The adoption of
ASU No. 2009-06 did not have any impact on the Company's financial position,
results of operations and cash flows.
In
December 2009, the FASB issued ASU No. 2009-17, “Improvements to Financial
Reporting by Enterprises Involved with Variable Interest Entities (“ASU
2009-17”)”. ASU 2009-17 amends the variable-interest entity guidance in FASB ASC
810-10-05-8 to clarify the accounting treatment for legal entities in which
equity investors do not have sufficient equity at risk for the entity to finance
its activities without financial support. ASU 2009-17 shall be effective as of
the beginning of each reporting entity’s first annual reporting period that
begins after November 15, 2009. ASU 2009-17 is effective for the Company in the
first quarter of fiscal 2011. The Company is currently evaluating the effect of
ASU 2009-17 on its consolidated financial statements and results of operation
and is currently not yet in a position to determine such effects.
None of
the above new pronouncements has current application to the Group, but may be
applicable to the Company’s future financial reporting.
13
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
3.
|
ACCOUNTS
RECEIVABLE, NET
|
Accounts
receivable as of December 31, 2009 and 2008 consisted of the
following:
As of
|
As of
|
|||||||
June 30,
|
June 30,
|
|||||||
2010
|
2009
|
|||||||
Accounts
receivable
|
$ | 11,074 | $ | 11,074 | ||||
Less:
Provision for doubtful accounts
|
(11,074 | ) | (11,074 | ) | ||||
$ | - | $ | 11,074 |
4.
|
INVENTORIES
|
Inventories
as of December 31, 2009 and 2008 are consisted of the following :
As of
|
As of
|
|||||||
June 30,
|
June 30,
|
|||||||
2010
|
2009
|
|||||||
Finished
goods
|
$ | 25,959 | 25,959 | |||||
Less:
Provision of obsolete
|
(25,959 | ) | $ | (25,959 | ) | |||
$ | - | - |
For the
years ended December 31, 2009 and 2008, the Company recorded no allowance for
slow-moving and obsolete inventories.
5.
|
REGISTERED
AND PAID-IN CAPITAL
|
Registered
and paid-in capital as of December 31, 2009 and 2008 is as follows
:
As of
|
As of
|
|||||||
June 30,
|
June 30,
|
|||||||
2010
|
2009
|
|||||||
Registered
and fully paid-in capital of RMB 500,000
|
$ | 62,373 | $ | 62,373 |
14
SHENZHEN
RUI PU DA ELECTRONIC TECHNOLOGY CO. LTD.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Stated
in US Dollars)
4.
|
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES
|
Selling,
general and administrative expenses for the years ended December 31, 2010 and
2009 are consisted, of the followings :
|
For
the six
|
For
the six
|
||||||
months ended
|
months ended
|
|||||||
June 30, 2010
|
June 30, 2009
|
|||||||
Staff
costs
|
$ | - | $ | 2,941 | ||||
Fax
and telephone
|
- | 174 | ||||||
Office
expenses
|
14 | |||||||
Other
operating expenses
|
- | 158 | ||||||
$ | 14 | $ | 3,273 |
5.
|
INCOME
TAXES
|
PRC Tax
PRC's
legislative body, the National People's Congress, adopted the unified Enterprise
Income Tax ("EIT") Law on March 16, 2007. This new tax law replaces the existing
separate income tax laws for domestic enterprises and foreign-invested
enterprises and became effective on January 1, 2008. Under the new tax law, a
unified income tax rate is set at 25% for both domestic enterprises and
foreign-invested enterprises. However, there will be a transition period for
enterprises, whether foreign-invested or domestic, that are currently receiving
preferential tax treatments granted by relevant tax authorities. Enterprises
that are subject to an enterprise income tax rate lower than 25% may continue to
enjoy the lower rate and will transit into the new rate over a five year period
beginning on the effective date of the EIT Law. Enterprises that are currently
entitled to exemptions for a fixed term may continue to enjoy such treatment
until the exemption term expires. Preferential tax treatments may continue to be
granted to industries and projects that qualify for such preferential treatments
under the new law.
For the six
|
For the six
|
|||||||
months ended
|
months ended
|
|||||||
June 30, 2010
|
June 30, 2009
|
|||||||
Income
before tax
|
$ | - | $ | - | ||||
Income
tax expense
|
$ | - | $ | - |
The
deferred tax asset and liability has not been recognized because of no valuation
allowance to be established for the years ended December 31, 2010 and
2009.
15