Sales : 10 258 140

Less: Cost of sales : (2 460 000)

Gross profit : 7 798 140

The company also had other income, which comprised of:

Dividends 1 500 000

Interest income 2 900 000

Legal expenses of R40 000 were paid to attorneys Vishnu and Anwar: - R5 000 of the fee was for debt collection. - R15 000 related to the drawing up of a restraint of trade agreement for an employee who had resigned to set up his own business. - R20 000 related to a dispute when one of Golden Fish (Pty) Ltd.s clients sued the company for supplying inferior products. Vishnu and Anwar was unsuccessful in this dispute and Golden Fish (Pty) Ltd was ordered to pay the client damages of R55 000

3. Golden Fish (Pty) Ltd pays a maintenance contractor to maintain the four koi ponds on its premises. The maintenance contractor is paid on an annual basis. On 1 November 2021, Golden Fish (Pty) Ltd paid the maintenance contractor R90 000 to maintain the koi ponds from 1 November 2021 to 31 October 2022. This is the only prepaid expense incurred by Golden Fish (Pty) Ltd for its 2022 year of assessment.

4. Golden Fish (Pty) Ltd paid R750 to Geoff Handyman for repairing an electrical point that was damaged in a heavy storm.

5. On the 1st of March 2021 Golden Fish (Pty) Ltd entered into an agreement with one of its employees who resigned from employment. In terms of this agreement, the ex-employee would not render her services anywhere in Gauteng for a period of five years commencing on 1 March 2021. In return for not being allowed to render a service for a period of five years, the company compensated the employee by awarding her R250 000 on 1 March 2021.

6. The following bad debts were written off during the year of assessment ended 31 January 2022: -

Trade debtors (note 1) = 84 000 The following bad debts were written off during the previous year of assessment and were recouped during the year of assessment ended 31 January 2022 - Trade debtors = 50 000 - Investment in Pyramid Scheme = 50 000 (the liquidators paid 5c for each rand invested) 5 000.

Notes:

Note 1 The accounting provision (according to list) for doubtful debts amounted to R190 000 on 31 January 2021 (consisting of R150 000 for trade debtors and R40 000 for a loan to an employee (Elsie Bent)), and R220 000 on 31 January 2022 (consisting of R180 000 for trade debtors and R40 000 for a loan to an employee (Elsie Bent)). This was for debts that were in arrears for 60 days but less than 120 days. Golden Fish (Pty) Ltd used IFRS 9 in the preparation of its financial statements.

7. On 5 January 2022, the company granted 3 000 shares to each and every one of its 90 permanent employees at a consideration of R0,50 a share. These shares have a nominal value of R1 each. Their market value was R5 a share on the date that the grants were approved. No restrictions apply to these shares. The plan in terms of which the shares were issued by the company qualifies as a broad-based employee share plan in terms of section 8B.

8. The company paid the following annuities to former employees: - R45 000 to an ex-employee who retired due to old age during the current year of assessment - R20 000 for the next ten years to the dependants of an ex-employee (who had died in a motor vehicle accident when delivering toys to a client).

9. The company entered into registered learnership agreements with Arnold Muller and Bianca du Plessis. The learnership agreements fulfil all the criteria of section 12H. -

Arnold Muller On 1 October 2021, the company employed Arnold Muller as a learner on a full-time basis, with a NQF level 6 qualification. In terms of the registered learnership agreement, the learnership will be completed after two years. -

Bianca du Plessis On 1 July 2021, the company employed Bianca du Plessis (a disabled person as defined in the Employment Equity Act 55 of 1998) as a learner on a part-time basis, with a NQF level 7 qualification. In terms of the registered learnership agreement, the learnership will be completed after six months (26 weeks).

10. The cost of sales consisted of the following amounts: - Purchases of trading stock of R2 500 000 (inclusive of the stock purchased from Italy note 11 below) were acquired during the year of assessment and the opening stock and closing stock was R1 340 000 and R1 380 000 respectively.

11. The company imported trading stock from Italy for 62 500 on 1 October 2021. The stock was delivered to the company on 31 December 2021 and brought into use on the same day.

The purchase of the stock was settled in full on 31 March 2022. - Assume that the spot rates of the relevant dates are as follows:

01 October 2021 1=R18.70 31

January 2022 1= R17.40

31 March 2022 1= R20.80

YOU ARE REQUIRED TO: Calculate the taxable income of Golden Fish (Pty) Ltd for its year of assessment ending 31 January 2022