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At year end, on the 3 0 June 2 0 2 3 , Ramco still owed their Russian Supplier USD 1 2 0 0 0
At year end, on the June Ramco still owed their Russian Supplier USD which was to be repaid on July After a long consultative process due to fear that the Rand ZAR would devalue, with the approval of the board, the financial manager had taken out a month forward exchange contract from Islamic Bank on May at a forward rate of R
On the June Islamic Bank was offering the following forward exchange contracts
Three month forward contract at a rate of RUSD
One month forward contract at a rate of R USD Exchange rates: Electric lawnmowers purchases for the year:
August $
February $
May $
The following spot rates were applicable:
August R
February R
May R
June R
Average exchange rate for year of assessment R
REQUIRED:
Calculate the income tax consequences of Ramco s foreign exchange exposure at June The exchange rates in part A are still relevant. Use legislation to support your answer where applicable.
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