Page 14 - Chapter 22 - Foreign Exchange (Cont.)

Example

 On 18 April 2014 Mthembu Trading (Pty) Ltd purchased trading

stock with a cost price of AUS$50 000 from a supplier in Australia.

In terms of the agreement with the supplier, the account was settled

in full on 30 June 2014. In July 2014 Mthembu Trading (Pty) Ltd

sold all the trading stock for R450 000.

The relevant rates of exchange are as follows:

Date AUS$ : R

 1 April 2014 1 : 5,70

 5 April 2014 1 : 5,78

 18 April 2014 1 : 5,90

 30 June 2014 1 : 6,15

YOU ARE REQUIRED TO calculate the effect of the above

transactions on Mthembu Trading (Pty) Ltd’s taxable income for its

year of assessment ending 28 February 2015. Round off to the nearest

rand.