Question 1 (25 Marks) Marko Polo Ltd is an importer of stationery, the business sells these items to a wholesaler for cash and to its retailers using the terms of an instalment credit agreement. The instalment credit agreement makes provision for the payment of a 25% deposit and the balance, which is inclusive of finance charges, over an 18-month period. The following financial information relates to the companys debtors with regard to their instalment agreements

Current year Debtors' balances at 28/29 February sales (excluding finance charges 320 000 Doubtful debts (included in the above amounts) debtors (excluding finance charges) 80 000 finance charges accrued in terms of section24J 64 000 40% Gross profit percentage R124 000 The companys taxable income for the previous year of assessment The companys taxable income for the current year of assessment R318 000 These amounts are prior to takong into account any of the adjustments made in respect of debtors You are required to calculate Marko Polo Ltd.'s taxable income for the previous and current years of assessment. Previous year 360 000 40 000 32 000 40%