Keletso has a farm in the northern district of Botswana where she specialises in rearing cattle and small livestock, goats and sheep. She has asked you to help in filling in her tax return and has given you the following information relating to her financial transactions. Details of income and expenditure for the year ended 30 June 2022

Purchase of cattle P730,000

Proceeds from sale of farm machinery P36,250

Construction of additional dipping tank P105,500

Cost of fence erection P45,000

Cost of sinking additional boreholes P30,000

Purchase of farm tractor P87,500

Farmworkers wages P112,500

Cost of stock feed P62,500

Cost of fireguard clearance P45,000

Proceeds from cattle sales P1,280,000

Other information

Movement of cattle stock during the year Cattle herd at beginning of year 1,200 head Purchases made during the year 300 head Increase from birth during the year 700 head Deaths 20 head Number of cattle sold 1,255 head Private consumption 5 head Payment of debt 13head Donations made to relatives 4 head Payment of dowry 5 head Further Details

1. The following values were applicable during the year: Standard value of cattle is P430 each; Market value is P1,800 each

2. Information about the values of Keletsos capital assets on 30 June 2021 is given below.

Cost (Pula) Allowances (Pula) Tax Written Down Value (TWDV) (Pula)

Tractors and trucks 405,000 105,000 300,000

Farm machinery 237,500 60,250 177,250

3.The farm machinery that was disposed had cost P41,250 when bought. Capital allowances of Cost of farm machinery disposed was P215,000 and capital allowances of P82,500 had been charged.

4. Koketso had other sources of income totaling P61,500 during the year

Required

a) Compute Koketsos chargeable farming income. (17 marks)

b) Compute the taxable income and tax payable (3 marks)