Inventories

12 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 4 – INVENTORIES

Inventories consisted of the following:

	June 30,		June 30,
	2020		2019
Raw materials	$	43,177,071	$	102,268,620
Supplies and packing materials	$	465,746	$	496,138
Work in progress	$	374,756	$	390,708
Finished goods	$	54,903,508	$	58,858,423
Total	$	98,921,081	$	162,013,889

During the year ended June 30, 2020, the Company sold compound fertilizers (finished goods) to certain parties at market price, and purchased equivalent amount of simple fertilizers (raw material) from the same parties also at market price. The simple fertilizers purchased, along with other materials were used in the Company’s production facility to manufacture compound fertilizers. While nonmonetary, the sales and purchase transactions were consummated independently under separate agreements at different times, and measured at the prevailing market value. The total amount of nonmonetary sales and purchases amounted to $43,537,582 during the year ended June 30, 2020. No gain or loss incurred as the result of the nonmonetary transactions.

For the fiscal year ended June 30, 2020, total inventories decreased $63,092,808, or 38.9%, to $98,921,081 from $162,013,889 for the fiscal year ended June 30, 2019. This decrease was mainly due to the decrease in raw materials which is from $102,268,620 to $43,177,071. In the second and third quarters of fiscal year 2020, the bad weather lasted a long time in Pinggu, which is a mountainous area where Gufeng locates. The frequent rainfall and snowfall caused the damaged of Gufeng’s warehouse. As a result, the inventories were seriously damaged. After comprehensive consideration and evaluation, the company confirmed the loss of $39,643,198 of raw materials in the fiscal year 2020. This impairment loss is reported in the General and Administrative expenses.