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Palo Duro, Inc. has prior service cost of $1,000,000 arising from a pension plan amendment. The...

Palo Duro, Inc. has prior service cost of $1,000,000 arising from a pension plan amendment. The board of directors decided to amortize this cost over the average remaining service period for its 60 employees on a straight-line basis. It is assumed that employees will retire at the rate of six employees per year over a 10-year period.

Compute the average remaining service life and the annual amortization of prior service cost for Palo Duro.

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