The following is the statement of comprehensive income of a farmer who commenced farming on 25 August 2018. Statement of comprehensive income Dividends received from South African Companies 6 000 Development expenditure: fee for letting of machine 9 600 Grazing fee 21 000 New irrigation equipment 25 000 interest received 1 920 Dams and boreholes 12 360 Livestock sales 831 000 Establishment of orchards 13 600 produce sales (wool & fruit) 114 220 New fencing 3 420 Road-making 15 340 Soil-erosion works 7 500 Fertilizers and manures 5 250 Food for livestock 9 360 General farming expenses 13 960 (all allowable) Interest payable 6 340 Livestock purchases 34 200 Repair of damaged fencing 3 900 Seeds 2 980 Wages and rations 21 556 Wear-and-tear and s 12B allowance 14 800 (all allowable) Net profit 794 174 983 740 983 740 1) When he commenced farming, the executors of the estate of his late father handed over to him 1800 ewes, 200 rams and 400 lambs. The current market value of these animals at the date of his fathers death was R650 000, and this was the fair market price on 25 August 2018. The standard value of this livestock would have been R12 800. 2) On 26 November he also received by way of donation from his uncle 600 ewes and 100 rams. At the date of donation, the fair market value of these animals was R200 000. The standard value would have been R4 200. 3) He has elected the standard values fixed by regulation. 4) During the year he, his wife and his family consumed produce at an estimated cost of R3 500. Taxation 3247 Page 3 of 5 5) 24 ewes and 12 rams were donated to charitable institutions during the year. These animals were acquired at a cost of R6 700, but at the date of donation their fair market value was R10 800. 6) At 28 February 2019 the numbers of livestock on hand were as follows: Ewes 1500 @ R6 Rams 250 @ R6 Lambs 400 @ R2 7) The estimated cost of production of wool and fruit on hand at 28 February 2019 was R9 100. Calculate the taxable income of the farmer for the year of assessment ended 28 February 2019.