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

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Accounting

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City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $26,500. In addition, City paid sales tax and title fees of $1,150 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,630. 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 auto was sold on January 1, Year 3, for $21,668. Determine the amount of gain or loss that would be recognized on the asset disposal. (Round the intermediate calculations to nearest whole dollar amount.) per year Year 1 a. Depreciation Year 2 Depreciation b. per year on sale

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