Question
Income Tax Law Subject Tanyas Trading Stock The following information is relevant for Tanyas pharmacy concerning its trading stock during the current tax year: Purchases
Income Tax Law Subject
Tanyas Trading Stock
The following information is relevant for Tanyas pharmacy concerning its trading stock during the current tax year:
Purchases of facial cleanser and vitamins: $120,000.
Sales of facial cleanser and vitamins: $300,000.
Total closing stock value for facial cleanser and vitamins for end of year prior to the relevant tax year: $400,000 (in total).
Trading stock values at end of current tax year:
- Facial cleanser: cost of $100,000, replacement value $90,000, market selling value $200,000.
- Vitamins: cost of $200,000, replacement value of $220,000, market selling value $300,000.
Required: Discuss the tax implications for the following transaction:
The trading stock implications for the facial cleaner and vitamins on the assumptions that Tanya wishes to minimise the income tax liabilities for the business?
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