Giant Jobs, Inc. amended its overfunded pension plan on December 31, year 7, resulting in the recognition of prior service cost of $ 700,000. On December 31, year 7, Giant Job’s employees had an average remaining service life of 20 years. The company has an effective tax rate of 30%. How should the prior service cost be reported in the December 31, year 7 financial statements?
a. $ 490,000 increase in net periodic pension cost.
b. $ 490,000 decrease in comprehensive income.
c. $ 700,000 decrease in net income.
d. $ 700,000 increase in pension benefit asset.