QUESTION 2 (40 marks) Book Haven (Pty) Ltd ('Book Haven'), incorporated in South Africa in 2010, is a local bookstore that sells new and second-hand books and hosts events such as author signings, book clubs, and workshops. Book Haven has a 31 March financial year-end (and year of assessment). Book Haven is not a small business corporation as defined for normal tax purposes. Below is an extract of the statement of profit or loss and other comprehensive income of Book Haven for its 2023 financial year. Notes: 1. Included in the cost of sales are books, acquired for R4 000 on 1 June 2022 that were donated to Little Einstein's Education Charity, a registered public benefit organisation. The market value of the books was R3 000 on 31 October 2022 , when it was donated. Book Haven obtained a valid tax receipt for the donation made. 2. The Reading Room (Pty) Ltd ('The Reading Room') is a local bookstore that also hosts book signings and book clubs and provides reading lessons which is in direct competition with Book Haven. R160 000 was paid by Book Haven to The Reading Room after signing an agreement on 1 January 2023. This agreement stipulates that The Reading Room will not open any of its stores within a 50 kilometres radius of Book Haven's store for a period of four years from the date of payment. The Reading Room is a personal service provider as defined in par 1 of the Fourth Schedule. 3. The storeroom of Book Haven deteriorated over time and was renovated in June 2022 to restore its impaired condition at a cost of R30 000. 4. Mrs Inkwell, one of Book Haven's employees, retired on 31 December 2022 after reaching the age of 65 years. Book Haven paid Mrs Inkwell a lump sum of R70 000 on 31 January 2023. 5. Upon Mrs Inkwell's retirement on 31 December 2022, she became eligible in terms of Book Haven's remuneration policy for a cash payout of R42 000 in respect of leave that she accumulated during her employment at Book Haven. R30 000 of this cash payout was paid to Mrs Inkwell on 31 January 2023, while the remaining R12 000 was paid to her on 2 April 2023. 6. Book Haven classified books sold on credit to a client at R10000 as bad debt during October 2021 but neglected to claim this amount as a deduction during the 2022 year of assessment. Consequently, Book Haven claimed this amount as a deduction during the 2023 year of assessment. 7. Salaries and wages comprise the following: 7.1. The total amount paid to employees in net salaries and wages was R620 000 . 7.2. Page Turner joined Book Haven as a full-time intern on 1 January 2023 , receiving a salary of R10 000 per month (which formed part of net salaries and wages expense in 7.1). Having completed matric in 2022 and gained her National Certificate, Page entered into a registered learnership agreement with Book Haven for a two-year period. The agreement adheres to all the specifications of the Skills Development Levies Act and is registered with the relevant SETA. 8. One of the directors of Book Haven, Mr Salinger Stories, signed a contract on 1 November 2022 with Book Haven, where Book Haven will lease a printing machine from Mr Salinger. The contract entitles Book Haven to the use of a printing machine for a period of five years. The contract provides for a once-off lease payment of R500 000, which becomes due and payable on the date of signature of the contract. 9. Books amounting to R8 000 were bought on 31 January 2023. The invoice was issued on 1 February 2023, but the delivery of the books only occurred on 1 April 2023, and the payment was made on 4 April 2023. 10. Book Haven contributed R450 000 on behalf of its employees to a pension fund during the 2023 year of assessment. 11. Book Haven incurred legal expenses of R30 000 to resist a claim for slander towards one of the authors, Mr Novel, who is Book Haven's most prominent attraction at the author signings. REQUIRED: Discuss, with reference to the relevant sections of the Income Tax Act, separately the deductibility and the value of all the expenses (notes 111 ) incurred by Book Haven (Pty) Ltd for the 2023 year of assessment. Ignore any capital gains tax and VAT implications. Where applicable, show all calculations. Please use the following structure to format your answer to Question 2: (40 marks)