Letsatsi Ltd (Letsatsi) is a company listed on the Johannesburg Stock Exchange. The primary business of Letsatsi is the manufacturing of solar panels and inverters. The financial year ends on the last day of February. The company is registered as a Category B, Value-added tax (VAT) vendor making 100% taxable supplies. The accounting system operated by Letsatsi has provided the following information for the tax period end-ing on 28 February 2023. All amounts are inclusive of VAT, where applicable, unless specifically indica-ted otherwise. 1. A motor vehicle was purchased on 31 January 2023 for R168 500 to be used by the managing director. The managing director had the sole use of this motor vehicle and the company bears the full cost of any repairs and maintenance. 2. On 1 January 2023, Letsatsi placed an order for trading stock with Powerhouse Solutions (Power-house), a non-resident company trading in Switzerland, for 12 500 (translated to R243 750). The trading stock was expected to be delivered on 1 February 2023 and Letsatsi paid a non-refundable deposit of 5 000 (translated to R97 500) to Powerhouse Solutions on 1 January 2023. The balance owing (7 500 translated to R146 250) was payable on 31 March 2023 and was settled on that date. The trading stock was delivered, and control of the trading stock passed to Letsatsi on 1 February 2023. The customs duty value of the trading stock was R250 0000 (excluding VAT). Import duties of R12 000 (excluding VAT) were paid on the trading stock on 10 February 2023. 3. On 10 January 2023, Letsatsis marketing division spent R16 000 (excluding VAT) on the deve-lopment of a website and video presentation to promote the solar panels and inverters. 4. Letsatsi signed a contract with Makhadu (Ltd) situated in Botswana on 1 February 2023. Letsatsi had previously supplied and installed several solar panels and inverters for Makhadu and had to render maintenance services to some of the previously installed solar panels. The cost of the maintenance services amounted to R135 000, and the maintenance was rendered on 15 February 2023. 5. Letsatsi manufactured and sold R1 200 000 (excluding VAT) worth of solar panels and inverters to the local market during the two-month tax period ending on 28 February 2023. The company also purchased local raw materials to the amount of R550 000 during the same period. 6. On 1 February 2023, the company purchased a second-hand solar battery from a non-vendor for R176 000. The open-market value on the date of sale was R188 000. 7. The company paid R350 000 towards salaries and R25 000 towards bank charges for the two-month tax period. 5 TAX3761 Test 1 PART A (continued) REQUIRED: MARKS a. Discuss, with supporting calculations, the VAT consequences for Letsatsi (Pty) Ltd ari-sing from the first two transactions. Note: Remember to discuss both input and output tax implications as well as the time and value of the supply. 12 b. Calculate the VAT payable by, or refundable to Letsatsi (Pty) Ltd for the tax period that ends on the last day of February 2023. 10 c. Discuss, whether the expense (Determine the total amount) with respect to the trading stock (Transaction 2) will be deductible from Letsatsi (Pty) Ltds gross income for the 2023 year of assessment. Refer to relevant case law. 10