ATP$3781$ CLASS EXERCISE

Trading stock

Dr Wealth

Trade mai $10$ years

patent $14$ years

Selma Ndapala commenced trading on $27$ February $2021.$ She purchased trading stock for N$$20000$ on $27$ February $2021.$ The trading stock was offered for sale at N$$30000.$ No items were sold on $27$ or $28$ February $2021.$

Required: Calculate Selma Ndapala's taxable income for the $2021$ year of assessment from the trade that she commenced on $27$ February $2021.$

On $29$ February $2020,$ Funks $($Pty$)$ Ltd had closing stock on hand, valued at N$$1000000.$ On $31$ March $2020$ it sold all this trading stock for N$$1500000.$ Funks $($Pty$)$ Ltd deals in a rare commodity. Although further trading stock from all its possible suppliers were sought, the company did not make any purchases of trading stock during the $2021$ year of assessment. The company has a February year end.

Required: Calculate Funks $($Pty$)$ Ltd$\text{'}$s taxable income from its rare commodity trade for the $2021$ year of assessment.

Parrot Ltd manufactures steel rods for the export market. It has a February year end. Trading stock with a cost of $N$$$800000$ was sold to an importer in a foreign country for an amount of N$$1700000.$ The goods were shipped cost insurance freight $($CIF$).$ CIF mean that the ownership only passes when the goods are off$-$loaded from the ship. At the end of the year of assessment ending $28$ February $2021$ the exported goods were not held or disposed of$,$ the reason being that the ownership has not passed yet. The goods were not included in closing stock.

Required: Briefly discuss how the goods in transit should be included in closing stock and when a deduction can be claimed.

Njiluwa Traders $($Pty$)$ Ltd$\text{'}$s $2020$ year of assessment ended $30$ June $2020$ it had closing trading stock with a value of $N$$$240000.$ This trading stock was sold by it for $N$$$280000$ during its $2021$ year of assessment ended $30$ June $2021.$

Required: Determine the effect of the transactions on the taxable income of the taxpayer concerned.

Khomas Dealers $($Pty$)$ Ltd$,$ a share$-$dealer, holds $40000$ Baines Ltd shares that it had purchased for $N$$$40000$ three years ago. During its $2021$ of assessment the market values of $000.$

Required: Determine the effect of the transactions on the taxable income of the tax concerned.