Reconcile PBO/FMV of Plan Assets; Compute Pension Expense. The following information relates to a firms pension plan.

Prior service cost due to 2013 amendment 60,000

PBO, January 1, 2013 1,000,000

FMV, January 1, 2013 1,200,000

Settlement interest rate 7%

Expected return on plan assets 9%

Actual return on plan assets 8%

Liability loss (gain) (40,000)

Contribution to plan trustee (made at end of year) 100,000

Service cost 115,000

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.