The Jay Company has had a defined benefit pension plan for several years. At the beginning of 2007 the company amended the plan; this amendment provided for increased benefits to employees based on services rendered in prior periods. The unrecognized prior service cost related to this amendment totaled $88,000; as a result, both the projected and accumulated benefit obligation increased.

The company decided not to fund the increased obligation at the time of the amendment, but rather to increase its periodic year-end contributions to the pension plan. In the past the company has never had an additional pension liability at year-end.

The following information for 2007 has been provided by the company's actuary and funding agency, and obtained from a review of its accounting records:

Accumulated benefit obligation (12/31) ......$740,000

Service cost ...................183,000

Discount rate .....................9%

Cumulative unrecognized net loss (1/1) .......64,500

Company contribution to pension plan (12/31) ......200,000

Projected benefit obligation (1/1)* ..........513,000

Plan assets, fair value (12/31) ............728,000

Prepaid pension cost (asset) (1/1) ...........31,500

Expected (and actual) return on plan assets .......48,000

Plan assets, fair value (1/1) ............480,000

*Before the increase of $88,000 due to the unrecognized prior service cost from the amendment

The company decided to amortize the unrecognized prior service cost and any excess cumulative unrecognized net loss by the straight-line method over the average remaining service life of the participating employees. It has developed the following schedule concerning these 50 employees:

Required
1. Compute the average remaining service life and prepare a schedule to determine the amortization of the unrecognized prior service cost of the Jay Company for 2007.
2. Prepare a schedule to compute the net gain or loss component of pension expense for 2007.
3. Prepare a schedule to compute the pension expense for 2007.
4. Prepare a schedule to determine the additional pension liability (if any) at the end of 2007.
5. Prepare all the December 31, 2007 journal entries related to the pensionplan.

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Employee Expected Years of Future Service Employee Expected Years of Numbers 6-10 11-15 16-20 21-25 Per employee 4 6 8 10 Numbers 26-30 31-35 36-40 41-45 46-50 Future Service 12 14 16 18 20