Chapter 5 . Primary Producers 183 QUESTION 5.35 (Comprehensive, livestock trading account) during the 2019/20 year: Larry Backwater, a resident primary producer, had the following receipts and payments RECEIPTS a Morraaug Sale of Sheep (13,400 head) - note 2 Wool Sales - note 3 Capital $ 326,000 Insurance Recovery - note 4 ation Funds 104,000 PAYMENTS 50,000 19,000 Purchase of Sheep (3,200 head) Connection of telephone lines 43,000 YAS Shearing Expenses - note 3 15,000 General Plant (1/10/19) effective life 10 years (J loennoo of beey) an 21,000 Water Pump (31/12/19) effective life 8 years 25,000 12,000 Drawings 30,000 Other expenses - all deductible 92,000 Note 1 - Past elections . During the 2017/18 year, Larry elected to defer tax profit of $80,000 from the forced disposal of sheep. He will apply this year's natural increase as part of the restocking process. 102 Note 2 - Sheep trading E STON . During the year, there were also: nogo art Natural Increase (11,500 head) Deaths (1,200 head) Rations (100 head, 40 of which were taken by Larry) xmeneros sri Opening Stock was 4,200 head valued at $49,600. . Larry chooses to use the prescribed rate for natural increase and average cost for valuing stock and rations. wong no eh Note 3 - Wool trading Transactions relating to wool sales were as follows: May clip (due to flooding) August clip $ 38,000 Gross sales $ 74,000 3,000 Less: Commissions and selling costs 5,000 35,000 NET RECEIPTS 69,000 8,000 Shearing Expenses 13,000 Note 4 - Insurance recovery NOOTe - 2 3Ton The insurance recovery relates to 700 sheep that were lost in floods. Note 5 - Decline in Value The decline in value deduction on assets held as at 30 June 2020 was $23,000. Based on the information provided calculate Larry's taxable income for the income. 2019/20 tax year. Use any available elections to minimise his taxable