O'Reilly Corporation sponsors a defined benefit pension plan for its employees. The long run expected rate of return on plan assets is 10% and the settlement rate is assumed to be 9%. The enacted tax rate is 40%. O'Reilly uses the straight-line method to amortize PSC and the corridor method to amortize gains and losses. No plan amendments are made during 2007. The following balances relate to this plan as of 12/31/06 Plan assets (actual fair value) Projected benefit obligation Unrecognized past service cost Unrecognized pension losses Average remaining service life of active employees Average remaining service life of employees active when plan amended $520,000 757,000 81,000 132,000 10 The following additional information about the operation of the plan during 2007 is provided by the plan actuary or the pension plan fund manager: Service cost Actual return on plan assets Funding (paid by O'Reilly to pension fund on 12/31/07) Benefits paid to retirees (from pension fund on 12/31/07) Actual projected benefit obligation (PBO) on 12/31/07 $98,000 42,000 128,000 85,000 850,000 Required A. Determine the amount of pension gain or loss to be amortized in 2007 B. Compute O Reilly's PBO loss or gain in 2007. C. Compute O' Reilly's asset loss or gain in 2007 D. What is O'Reilly's unrecognized gain/loss balance at the end of 2007? E. Compute O'Reilly's PSC amortization in 2007. Assume that O Reilly has only amended its plan once in the past F. Complete the pension worksheet for 2007 G. Write a journal entry for O'Reilly's 2007 pension activity