DEFERRED TAX ASSETS

3 Months Ended

Mar. 31, 2014

DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES

NOTE H- DEFERRED TAX ASSETS

Deferred tax assets consisted of the following as of March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
Deferred tax assets - current
Allowance for doubtful accounts	$	636,940	$	578,928
Revenue (net off cost)		16,687		8,653
Unpaid accrued expenses		127,510		105,558
Warranty		732,337		699,816
Deferred tax assets		1,513,474		1,392,955
Valuation allowance		―		―
Net deferred tax assets - current	$	1,513,474	$	1,392,955

Deferred taxation is calculated under the liability method in respect of taxation effect arising from all timing differences, which are expected with reasonable probability to realize in the foreseeable future. The Company and its subsidiaries do not have income tax liabilities in U.S. as the Company had no United States taxable income for the reporting period. The Company's subsidiary registered in the PRC is subject to income taxes within the PRC at the applicable tax rate.