Question

QUESTION 2         
John Cena is a farmer in the Zambezi region and he supplies you with the following
information for the year ended 28 February 2019.
        N$
Cattle sales 960 000
Maize sales 120 000
Land rentals   28 000
Cattle purchased 557 000
Farm wages purchased 60 000
General farming expenses (all deductible) 112 000
Construction of dam- materials purchased 13 000
Wages for construction of dam   7 000
Fencing erected    8 250
Motor vehicle expenses (note 2) 410 000

Notes

1. During the year, John Cena and his family consumed 3 cows. The market value of one cow is N$5,750. He also donated 4 cows to the local farmers union festival.

2. He purchased a Toyota Land Cruiser 4 x 4 during the year for N$390 000 (VAT included). He uses it on the farm as well as going on holiday and private and business trips to Otjiwarongo, Swakopmund, Windhoek etc. His logbook shows the following: Farm use 12 000 km. Holidays 33 000 km, going to town for business and private purposes 50/50. His total kilometre reading on 28 February 2017 was 63 000 km. He spent N$20 000 on fuel, oil and maintenance during the year.

3. The balance brought forward from the prior year, relating to capital development expenditure, amounts to N$11,000.

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REQUIRED:
CALCULATE THE TAXABLE INCOME FOR JOHN CENA FOR THE 2019 YEAR OF ASSESSMENT.
Marks will be allocated for reasons whenever an amount is excluded from your calculation. Ensure that you use the correct format as per the Income Tax Act. Provide your answer in table format.                

Answer 1

Total Income	N$
Cattle Sales	960,000
Maize Sales	120,000
Land Rentals	28,000
Total	1,108,000
Total Expenditure	N$
Cattle purchased	557,000
Cattle consumed & donated (7x5750)	40,250
Farm wages purchased	60,000
General farming expenses	112,000
Purchase of dam materials	13,000
Wages for construction	7,000
Fencing erected	8,250
Motor Vehicle expenses (excl. purchase)	20,000
Total	817,500

Total Taxable Income = N$(1,108,000-817,500) = N$ 290,000