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NOTE 7 - IDLE ASSETS
6 Months Ended
Jun. 30, 2011
Other Assets Disclosure [Text Block]
NOTE 7 – IDLE ASSETS

To build a new wet method production line, the Company retired its fourth dry method production line in July 2008, which was built in 2007. Most of the equipment and parts were in good condition and able to be used in the new wet method production line. The remaining net book value of the fourth dry method production line was RMB 14,735,993 ($2,160,297, translated at 2008 exchange rate). In July 2008, the Company decided to stop depreciation of these assets until completion of the new production line.

On October 26, 2010, the Company completed the construction of the new wet production line. Approximately 50% of the equipment and parts of the fourth dry production line were used in the Company’s new wet method production line. The remaining equipment and parts with net book value of RMB 7,391,507 ($1,119,961, translated at 2010 exchange rate) became idle assets. The Company planned to use remainder of the equipment and parts as replacement parts for the Company’s other three dry production lines, or to sell them in the used market place.  The estimated remaining useful lives for the idle assets are seven years. The Company’s policy is to depreciate the idle assets during their estimated remaining useful lives until they are reused or sold.

Depreciation of idle assets was $40,595 and $80,720 for three and six months ended June 30, 2011. Depreciation of idle assets was included in the depreciation expense.