Pacific petroleum holds huge reserves of oil assets. assume that at the end of 2018, pacific petroleum's cost of oil reserves totaled $ 50,000,000, representing 5,000,000 barrels of oil.
requirement:
1. which method does pacific petroleum use to compute depletion?

Units of production method

Explanation:

The formula to compute the depreciation expenses under the units-of-production method:

Depreciation per miles or hours = (Original cost - residual value) ÷ (estimated production)  

For first-year or for another year, the depreciation expense would be

= Production units in a year × depreciation per miles or per hour

So, for computing the depletion, the unit of production method is used                                        

answer; ///global;

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