The following data relate to the defined benefit pension plan of the Chicago Corn Corporation during 2013 (all amounts in thousands):
Service Cost $4,200
Actual return on the pension plan assets $625
Benefits paid to retirees $250
Contributions to the pension plan assets $2,625
Discount (settlement rate) for PBO 9%
Expected return on pension fund 10%
In addition, at the beginning of the year, Chicago Corn Corporation had a projected benefit obligation (PBO) of $25,000 and a pension fund assets with a fair value of $23,000. There were no prior service cost, nor were the deferred pension gains or losses.
(a) Determine the pension-related amount that should be reported on the company’s balance sheet on January 1, 2013.
(b) Determine the pension benefit obligation as of December 31, 2013.
(c) Compute the fair value of the pension fund as of December 31, 2013.
(d) Compute pension expense for the year.
(e) Prepare the summary journal entries relating to the pension plan for 2013.