Recognition of Pension Liability Dependable Products Corporation has a defined-benefit pension plan that provides a payment of $1,000 per month to each retiree who worked for Dependable Products for more that 10 years prior to retirement.

a. What is meant by a defined-benefit pension plan?

b. Why is it considered inappropriate to treat the amounts paid to retirees as compensation expense at the time of payment?

c. How should Dependable Products determine the amount to be recorded as pension expense for the current period?

d. List four factors that would be important in determining the amount of pension expense to record.