CHINA HGS REAL ESTATE INC. | 2013 | FY | 3

NOTE 13. IMPACT OF NEW REVENUE RECOGNITION POLICY
 
As disclosed in note 2, the impact of adoption of percentage of completion revenue recognition method on the consolidated financial statements for the three and nine months ended June 30, 2013 as previously reported is summarized below:
 
 
 
Balance Sheet as of
June 30, 2013
 
 
 
As
previously
reported-
 
Percentage
completion
method-
 
Cost and earnings in excess of billings
 
$
-
 
$
9,493
 
Deferred tax liability
 
 
-
 
 
16,106
 
Tax payable
 
 
4,890,993
 
 
4,955,415
 
Billings in excess of cost and earnings
 
$
-
 
$
826,540
 
 
 
 
For the three months ended
June 30, 2013
 
For the nine months ended
June 30, 2013
 
 
 
As
previously
reported-
 
Percentage
completion
method-
 
As previously
reported-
 
Percentage
completion
method-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
7,174,974
 
 
8,463,417
 
$
37,561,349
 
$
38,849,792
 
Cost of sales
 
 
(3,549,401)
 
 
(4,466,736)
 
 
(18,057,656)
 
 
(18,974,991)
 
Sales tax
 
 
(489,971)
 
 
(554,393)
 
 
(2,349,413)
 
 
(2,413,835)
 
Gross profit
 
 
3,135,602
 
 
3,442,288
 
 
17,154,280
 
 
17,460,966
 
Deferred tax provision
 
 
-
 
 
16,106
 
 
-
 
 
16,106
 
Net income
 
 
2,262,545
 
 
2,553,125
 
 
13,538,342
 
 
13,828,922
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted income per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
0.05
 
 
0.06
 
 
0.30
 
 
0.31
 
Diluted
 
 
0.05
 
 
0.06
 
 
0.30
 
 
0.31
 

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