assuming a tax rate of 40 what is the net effect of the required adjustment on accum 604571
Tulip Corporation, a publicly traded company, implemented a defined benefit pension plan for its employees on January 2, 2004. The following data are provided for 2006 and as of December 31, 2006:
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Projected benefit obligation |
$600,000 |
Accumulated benefit obligation |
550,000 |
Plan assets at fair value |
520,000 |
Pension cost for 2006 |
180,000 |
Pension contribution for 2006 |
150,000 |
Assume that as of January 1, 2006, Tulip’s pension plan was fully funded, and there were no recorded pension assets or liabilities on the balance sheet. Assuming a tax rate of 40%, what is the net effect of the required adjustment on accumulated other comprehensive income on December 31, 2006?
- $90,000 decrease.
- $108,000 decrease.
- $36,000 decrease.
- $0