QUESTION TWO

$[45]$

Kyle Naidoo, a resident of the Republic, sells and repairs household appliances from a shop he leases in a local shopping centre. Kyle operates a sole proprietor and is registered for VAT on the invoice basis. He makes solely taxable supplies.

An analysis of Kyle's income and expenditure for the two$-$month tax period ending $28$ February $2023$ is set out below. Unless otherwise stated, all amounts are inclusive of VAT, where applicable. All transactions are with registered VAT vendors, unless otherwise stated.

$\backslash$table$[[,$R$],[$Income$,],[$Sales of appliances,$241500],[$Repairs of appliances,$26450],[$Interest$,2415],[$Indemnity award $($note $1),23000],[,],[$Expenditure$,],[$Bad debts $($note $2),10350],[$Bank charges,$805],[$Depreciation $($note $3),4025],[$Insurance premiums $($note $4),3680],[$Fuel$,920],[$Printing and stationery,$1265],[$Purchases $($note $5),93150],[$Salaries$,28450],[$Rentals $($note $6),30536]]$

Notes

The indemnity award of R$23000$ was received from Kyle's insurer for trading stock that was stolen from his shop in January $2023$ when he had a break$-$in$.$

Bad debts of R$10350$ were written off, comprising of:

R$7130$ owing by a long$-$standing customer on a credit sale. This customer has since emigrated and Kyle has been unable to trace him.

R$3220$ was lent to an employee, who left town without repaying the loan.

Depreciation $($for the two$-$month tax period$)$ is charged for the following assets:

$\backslash$table$[[,$R$],[\backslash$table$[[$Shop fittings that were purchased in a previous tax period for$],[$R$3565]],258],[$A computer that was purchased on $1$ January $2023$ for R$11500,417],[\backslash$table$[[$Delivery van $($single$-$cab bakkie$)$ that was purchased on $1],[$February $2023$ for R$231150]],3350],[$Total depreciation,$4025]]$

Insurance premiums are made up as follows:

$\backslash$table$[[,R$