Steel (Pty) Ltd

Steel (Pty) Ltd is a resident of South Africa. The financial director has approached you to help him with the final calculation of the company's taxable income. Steel (Pty) Ltd has 4 shareholders and their main business is the supply of computers. During the current year of assessment, the company showed a net profit of R1 268 000. Steel (Pty) Ltd has a February year end.

The following items were not taken into account in the calculation of the net profit:

1. Trading stock was purchased on 9 January 2023 for an amount of R310 000. On 28 February 2023 only half of the consignment was delivered to Steel (Pty) Ltd.

2. On 28 February 2022 the closing stock amounted to R265 000. On 28 February 2023 the closing stock amounted to R369 000.

3. On 1 July 2022, Steel (Pty) Ltd received the following dividends:

R10 500 from an unlisted foreign company. Steel (Pty) Ltd holds 6% in the foreign company.

4. On 1 April 2022 Steel (Pty) Ltd declared a dividend of R84 000 to all shareholders registered on 30 April 2022 and paid the dividend on 3 May 2022 to the shareholders.

5. On 1 December 2022 the company declared trading stock with a cost of R94 000 (market value: R103 500) as a dividend in specie to shareholders registered on 25 December 2022.

6. On 1 February 2023 Steel (Pty) Ltd declared four printers (held for investment purposes) as a dividend in specie to its shareholders. The printers were purchased on 1 October 2022 on sale at a cost of R7 100 each. The market value of the printers on 1 October 2022 and 1 February 2023 amounted to R8 200 and R7 300 each respectively. SARS allows a write off period of 3 years for computers.

7. Steel (Pty) Ltd is also in the business of buying and selling shares of South African companies. On 1 March 2022, Steels opening stock of shares comprised of:

1 000 Water Ltd shares purchased for R15 000 in August 2018 (market value 1 March 2022: R30 000). 5 000 Juice Ltd shares purchased in August 2021 for R25 000 (market value 1 April 2022: 20 000) The following transactions were entered into with regard to the shares during the 2023 tax year of assessment:

In October 2022 all of the Water Ltd shares were sold for R33 500

In December 2022 all the Juice Ltd shares were sold for R10 000.

Source: Kavai, P. 2023

Required

Calculate Steel (Pty) Ltd's taxable income for the 2023 year of assessment. Show all calculations and give clear reasons for inclusions or exclusions of amounts. Round all amounts off to the nearest rand. Start your calculation with the net profit of R1 268 000. Ignore VAT.