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At December 31, 2017, Mallory, Inc., reported in its balance sheet a net loss of $12 million related to its postretirement benefit plan. The actuary for Mallory at the end of 2018 increased her estimate
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At December 31, 2017, Mallory, Inc., reported in its balance sheet a net loss of $12 million related to its postretirement benefit plan. The actuary for Mallory at the end of 2018 increased her estimate of future health care costs. Mallory's entry to record the effect of this change will include: Group of answer choices A debit to Post-retirement benefit expense and a credit to APBO. A debit to Loss-OCI and a credit to APBO. A debit to APBO and a credit to Loss-OCI. A debit to Post-retirement benefit expense and a credit to Loss-OCI.

User Abalakin
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Answer:

A debit to Loss-OCI and a credit to APBO

Step-by-step explanation:

When the net loss is reported on the balance sheet with respect to the postretirement benefit plan also the cost of the future health care is rise so the impact of the change would be that the other comprehensive income i.e. OCI would be debited while on the other hand the accumulated post benefit obligation would be credited

therefore the second option is correct

User Dean Brundage
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