
Concept introduction:
Depletion:
When natural resources such as coal, iron ore, oil reserves and mineral etc. are extracted from the earth the company records the cost of extraction to the particular unit of the natural resource that is being extracted and the process of allocating cost according to the usage of natural resource during a specific period is called as depletion.
Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Depreciation is the process in which the cost of the fixed assets other than land is allocated to expense over the useful life of the asset.
Amortization:
Amortization is same as depreciation but it is used for intangible assets like patents, franchise,
It is a statement of the financial position of the company which specifies the assets, liabilities and equity at a specified date.
Determine the balance sheet classification and cost allocation process for each item.

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Chapter 7 Solutions
Cornerstones of Financial Accounting
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