Reconcile PBO/FMV of Plan Assets; Compute Pension Expense. The following information relates to a firm’s pension plan.
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Prior service cost due to 2013 amendment 60,000 |
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PBO, January 1, 2013 1,000,000 |
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FMV, January 1, 2013 1,200,000 |
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Settlement interest rate 7% |
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Expected return on plan assets 9% |
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Actual return on plan assets 8% |
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Liability loss (gain) (40,000) |
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Contribution to plan trustee (made at end of year) 100,000 |
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Service cost 115,000 |
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Payments to retired employees 30,000 |
REQUIRED
a.) Compute the December 31, 2013, PBO and FMV of pension assets.
b.) Compute 2013 pension expense.
c.) Use the financial statements effects template to show the effects on the 2013 financial statements.
