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

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

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

The farm machinery that was disposed had cost P107,500 when bought. Capital allowances of P41,250 had been charged.

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

Required

Compute Koketsos chargeable farming income. (17 marks)

Compute the taxable income and tax payable (3 marks)