BG (Pty) Ltd purchased a second-hand manufacturing machine for R500 000 (excluding VAT) on 1 November 2018 and brought it into use in a process of manufacture on that date. BGs year-end is 31 December. In May 2019 the machine was sold for R650 000 (excluding VAT) and not replaced. The machine was used in a process of manufacture until May 2019. Assume that BGs taxable income for the year ended 31 December 2019, before taking the above information into account, is R1.2 million.

Calculate the taxable income of BG (Pty) Ltd for the year of assessment ended 31 December 2019. Indicate hoe the transactions concerning the machine affect other taxable income, showing the net effect of the principal Act separate from the net effect of the Eighth Schedule.