City Taxi Service purchased a new auto to use as a taxi on January 1,...
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City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $29,600. In addition, City paid sales tax and title fees of $550 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,470. Required a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2. (Round your answers to the nearest whole dollar amount.) b. Assume the van was sold on January 1 Year 3, for $23,320. Determine the amount of gain or loss that would be recognized on the asset disposal. (Amounts to be deducted should be indicated with minus sign. Round the intermediate calculations to nearest whole dollar amount.) a. Year 1 Depreciation Year 2 Depreciation per year per year on sale
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