QUESTION $2(27$ marks$)$

Sofia Limited is a national airlines company that offers long$-$term employee benefits to their employees. One of the employee benefits available to pilots and air hostesses is the defined benefit pension plan which will allow the eligible employees to receive monthly pension payouts once they are retired until their deaths. The following information relates to the financial year ended $31$ December $2023$:

R

Current service costs

$5400000$

Pension benefits paid to former employees $($Note $2)$

$14000000$

Contributions paid by the employer to the fund $($Note $2)$

$25300000$

Past service costs curtailment $($Note $1)$

$18000000$

Net present value $($NPV$)$ of the pension obligation on $1$ January $2023$

$95500000$

Net present value $($NPV$)$ of the pension obligation on $31$ December $2023($as per the actuary after taking into account the curtailment in Note $1)$

$89200000$

Fair value of the plan assets on $1$ January $2023$

$102000000$

Fair value of the plan assets on $31$ December $2023$

$107000000$

Additional information:

Note $1$:

The terms of the defined benefit plan were amended and as a result the benefits payable will be reduced by R$18000000$ with effect from $31$ December $2023.$ Employees were contacted with regards to this amendment, and they did not object to the change.

Note $2$:

The contributions and benefits were paid on the last day of the financial year i$.$e$.$ on $31$ December $2023.$

Note $3$: The market interest rate on high$-$quality corporate bonds was $12\%$ for the financial year ended $31$ December $2023.$

REQUIRED:

Prepare extracts to the Statement of Profit and Loss and Other Comprehensive Income of Sofia Ltd for the year ended $31$ December $2023,$ in accordance with IAS $19,$ using all the information given in the question.

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Comparative figures are not required.

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Show and reference all your calculations and workings clearly.

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Round all amounts to the nearest Rand.