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Frank is in the business of importing leather sandals from Indonesia and selling them in Maker's Markets in regional Victoria. On 1 June, he purchased

Frank is in the business of importing leather sandals from Indonesia and selling them in Maker's Markets in regional Victoria. On 1 June, he purchased $15,000 of leather sandals from a Japanese shoe maker. Frank does not have ownership of the leather sandals until they are unloaded from the cargo ship at Port Kembla, NSW on 15 June. At 30 June, Frank had 30 pairs of leather sandals in stock. The sandals had cost him $30 a pair and he sells them for $85 a pair. In December, Frank took 5 pairs of the sandals from his stock to give to family as Christmas gifts- The leather sandals had cost Frank $150 and he would usually have sold them for $425. Business was good for Frank in the first six months of the current financial year, and he held a Half Financial Year Sale. The HFY Sale was a huge success and Frank completely sold out of stock within a couple of days. Frank sold the stock for $6,500. That stock had cost him $3,000 in total and he would normally have sold it for $8,500. Following the sale, Frank bought 100 pairs of newly designed hand dyed leather sandals from a Balinese shoemakerThese cost $50 a pair and Frank expects to sell them for $125 a pair. Because he is so excited about the new design, Frank decides to sell five pairs of the new leather sandals to his friends at a 50% discount-charging them only $62.50 for each pair. Assume that at the end of the current financial year, Frank still has 20 pairs of the new design hand dyed leather sandals in stock. Frank wishes to minimise his tax liability in the current financial year. Advise Frank of the tax consequences arising from the information.

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