Capital assets Import of manufacturing machine On 1 March 2022, a new manufacturing machine was purchased at cost of $120 000 from a supplier in the United States of America (USA), on credit. The machine was shipped free-on-board on 1 March 2022 and was delivered to the companys premises on 15 March 2022. Import duties amounted to R90 000 and VAT paid on importation amounted to R310 500. A special foundation was required for the installation of the machine, which cost a further R65 000. The machine was brought into use on 20 March 2022 and the $120 000 purchase price due to the supplier was settled in full on 31 May 2022. Goodsoles entered into a 3-month forward exchange contract (FEC) on 1 March 2022 to serve as a hedge in respect of the debt due to the foreign supplier. The forward rate at this date was $1 = R14.80. The following exchange rates may be relevant: Date Spot rate Market-related forward rate 1 March 2022 $1 = R14.78 $1 = R14.80 (3-month contract) 15 March 2022 $1 = R14.75 20 March 2022 $1 = R14.73 31 March 2022 $1 = R14.70 $1 = R14.90 (2-month contract) 30 April 2022 $1 = R14.80 $1 = R14.85 (1-month contract) 31 May 2022 $1 = R14.95 Delivery vehicles One of the companys delivery vehicles was involved in an accident on 31 July 2021 and was writtenoff. The vehicle was originally purchased from a VAT vendor, for R552 000 (incl. VAT) on 1 October 2020 and immediately brought into use. Insurance proceeds of R345 000 was received on 18 August 2021, in full and final settlement of the claim. A 4-year write-off period (straight-line basis) is provided for delivery vehicles in terms of Binding General Ruling 7. The proceeds were Page 4 of 6 used to purchase a new replacement delivery vehicle from a VAT vendor on 1 September 2021, at a cost of R483 000 (incl. VAT), which was immediately brought into use. Calculate the income tax effects relating to the information given for capital assets, for the 2022 and 2023 years of assessment. Marks are allocated as follows: Import of manufacturing machine (9 marks) Delivery vehicles (8 marks) You may assume that the 2022 tax legislation remains unchanged and the taxpayer wishes to elect any favourable tax treatment available to it. No assets were disposed of during the 2023 year of assessment.