ANSWER ALL FIVE QUESTIONS IN THIS SECTION Question One MR operates a defined benefit pension plan for its employees. At 1 January 2021 the fair value of the pension plan assets was R3,700,000 and the present value of the pension plan liabilities was R3,900,000. The actuary estimated that the service cost for the year to 31 December 2021 was R1,100,000. The pension plan paid R340,000 to retired members and MR paid R760,000 in contributions to the pension plan in the year to 31 December 2021. The actuary estimated that the relevant discount rate for the year to 31 December 2021 was 5%. At 31 December 2021 the fair value of the pension plan assets was R4,400,000 and the present value of the pension plan liabilities was R4,700,000. Required: In accordance with IAS 19 Employee Benefits: (a) (i) Calculate the expense that will be charged to MR's profit for the year ended 31 December 2021 in respect of this pension plan. (b) (ii) Calculate the net actuarial gain or loss on pension plan assets and liabilities that will be included in MR's other comprehensive income for the year ended 31 December 2021. Your answer should clearly state whether it is a net gain or a net loss. (5 marks) Asset sale On 31 December 2021 MR sold a piece of undeveloped land to CW and recorded the following entry: Dr Bank Cr Land (Cost) Cr Gain on sale R6,000,000 R4,200,000 R1,800,000 The sale agreement specifies that MR has the option to repurchase this land within the next two years for between R6,400,000 and R6,700,000 depending on the date of the transaction. MR is required to repurchase the land on 31 December 2023 for R6,700,000 if the option is not exercised before this date. CW must gain MR's approval before it can use the land for any purpose. The land had a market value of R8,000,000 on 31 December 2021. Required: (b) Discuss how MR should have accounted for this transaction in its financial statements for the year to 31 December 2021, in accordance with IAS 1 (revised) Presentation of Financial Statements. (5 marks) Total for Question One = 10 marks