Calculate Surplus/deficit Star Company Calculated Its Defined Benefit Obligation at December 31

question 10

Essay

Calculate surplus/deficit
Star Company calculated its defined benefit obligation at December 31, 2020 to be $ 975,000. The fair value of the plan assets on the same date was $ 545,000.
Instructions
Calculate Star Company's plan surplus or deficit and explain what the surplus or deficit means.

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Definitions:

Bid-ask Margin

The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask), indicative of market liquidity.

Market Maker

An entity that buys and sells securities from their own inventory, ensuring liquidity and trading activity in financial markets.

Fracking

A technique for extracting oil and natural gas from rock by injecting high-pressure fluid to create fractures, allowing resources to be more easily harvested.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers matches the quantity supplied by producers, resulting in market balance.