Question $4(15$ Marks$)$

The following defined benefit pension data for Mercury Industries Inc. apply to the year $2023$:

$2023$AmountDefined benefit obligation, January $1$st $-$ $$660,000$

Plan assets, January $1$st$,2023-$ $$458,000$

Net pension liability, January $1$st$,2023-?$

Annual pension service cost $-$$$58,000$

Contributions$-$ $$30,000$

Benefits paid to retirees$-$ $$41,000$

Actual return on plan assets $-$ $$50,000$

Past service cost $($plan amended on January $1,2023)-$$$100,000$

Defined benefit obligation, December $31$st$,2023-?$

Other information:

Expected return on plan assets & discount rate: $8\%$

The company follows IFRS in preparing its financial statements.

Required:

Based upon the above information, prepare pension worksheet for $2023(8$ marks$)$

Provide the journal entry for the $2023$ pension expense $(5$ marks$)$

In a defined benefit pension plan, what does the defined benefit obligation represent? Why is the obligation not included in the statement of financial position? $(2$ marks