TAN Company has a defined benefit pension plan for its employees. The plan has been in existence for several years. During 2015, for the first time, TAN experienced a difference between its actual projected benefit obligation. This resulted in a cumulative experience loss of $29,000 at the end of 2015, which it recorded and which did not change during 2016. TAN amortizes any excess loss by the straight-line method over the average remaining service life of its active participating employees. It has developed the following schedule concerning these 40 employees:

Employee Numbers	Expected Years of Future Service*	Employee Numbers	Expected Years of Future Service*
1-5	3	21-25	15
6-10	6	26-30	18
11-15	9	31-35	21
16-20	12	36-40	24

*Per employee

TAN makes its contribution to the pension plan at the end of each year. However, it has not always funded the entire pension expense in a given year. As a result, it had an accured pension cost liability of $65,000 on December 31, 2015.

In addition to the preceding information, the following set of facts for 2016 and 2017 has been assembled, based on information provided by TANs actualy and funding agency, and obtained from its accounting records:

	2016	2017
Plan assets, fair value	$620,500	$860,550
Cumulative net loss (1/1)	29,000	29,000
Expected (and actual) return on plan assets	40,500	62,050
Company contribution to pension plan (12/31)	175,000	178,000
Projected benefit obligation (1/1)	470,000*	686,000
Discount rate	10%	10%
Service cost	169,000	175,000
Plan assets, fair value (1/1)	405,000	620,500

*Includes the cumulative net loss at the end of 2015

Required:

• 1.Calculate the average remaining service life of TANs employees. Compute to one decimal place.
• 2.Prepare a schedule to compute the net gain or loss component of pension expense for 2016 and 2017, assuming that the company uses the corridor approach. For simplicity, assume the average remaining life calculated to requirement 1 is applicable to both years.
• 3.Prepare a schedule to compute the pension expense for 2016 and 2017.
• 4.Prepare all the journal entries related to TANs pension plan for 2016 and 2017.
• 5.What is TANs total accrued/prepaid pension cost at the end of 2016? Is it an asset or liability?