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City Taxi Service purchased a new auto to use as a taxi on January 1,...

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Accounting

City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $26,700. In addition, City paid sales tax and title fees of $680 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,460.
Required
6. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2
Note: Round your answers to the nearest whole dollor amount.
b. Assume the auto was sold on January 1, Year 3, for $21,404. Determine the amount of gain or loss that would be recognlzed on the asset disposal.
Round the intermediate colculations to nearest whole dollar amount.
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