Smart Edge Limited buys and sells smart devices and is a South African company with a February year$-$end. On $1$ November $2023,$ Smart Edge Limited purchased trading stock on credit from a supplier in Germany for a foreign currency amount of $10000.$

Furthermore, a matching FEC was also entered into on $1$ November $2023$ to serve as

a hedge in respect of the debt. The forward rate of the FEC on $1$ November was

$1=$ R$21,20.$ The debt was paid on $31$ May $2024.$

Assume that the exchange rates on the relevant dates are as follows:

Date and Spot rate

$1$ November $20231=$ R$19,60$

$28$ February $20241=$ R$21,00$

$31$ May $20241=$ R$22,50$

The market$-$related forward rate available for a three$-$month contract on $28$ February

$2024($the remaining period of the FEC$)$ is $1=$ R$21,40.$

REQUIRED:

Separately for $2024$ and $2025,$ calculate the foreign exchange differences that arise

from the transactions for Smart Edge Limited$$s $2024$ and $2025$ years of assessment in

terms of Section $24$I of the Income Tax Act.

Show all your calculations and clearly indicate whether an amount is a foreign

exchange gain or loss