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QUESTION FOUR [10] Trading stock is regarded as a revenue asset. Lux Cars (Pty)...

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Accounting

QUESTION FOUR
[10]
Trading stock is regarded as a revenue asset. Lux Cars (Pty) Ltd, a company operating as a retailer of motor vehicles, purchased a motor vehicle in January 2023 for R650000(net of VAT) and sells it in March 2023 for R720000(net of VAT). The company's year of assessment ends on the last day of February each year.
Required: Show the effect on taxable income of the above transactions for Lux Cars (Pty) Ltd for the 2023 and 2024 years of assessment.
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