Required: Advise Sport Pty Ltd as to the trading stock implications for the tax year.

Sport Pty Ltd is a retailer that sells sporting shoes and clothes. The following information applies to the relevant tax year:

• Purchases of new sports shoes and clothes for sale: $120,000.
• Sales of sports shoes and clothes: $300,000.
• Closing stock value for end of year prior to the relevant tax year: $400,000.
• Trading stock values at end of relevant tax year:
  • sports shoes: cost of $100,000, replacement value $90,000, market selling value $200,000; and
  • sporting clothes (non-footwear): cost of $200,000, replacement value of $220,000, market selling value $300,000.

subject principles of income tax