Question
City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $24,400. In addition, City paid sales tax
City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $24,400. In addition, City paid sales tax and title fees of $1,470 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $6,710.
Required:
Using the straight-line method, compute the depreciation expense for Year 1 and Year 2.
Note: Round your answers to the nearest whole dollar amount.
Assume the auto was sold on January 1, Year 3, for $20,937. Determine the amount of gain or loss that would be recognized on the asset disposal.
Note: Round the intermediate calculations to nearest whole dollar amount.
a. Year 1 Depreciation _______ per year
a. Year 2 Depreciated ________ per year
b. _____________ on sale __________
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