City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $20,700. In addition, City paid sales tax and title fees of $850 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $6,840. Required: a. 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. b. Assume the auto was sold on January 1. Year 3, for $18,016. 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 Depreciation per year b. Gain on sale