City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $22,800. In addition, City paid sales tax and title fees

of $1,040 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,510.

Required

a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2.

b & c. Assume that the taxi was sold on January 1, Year 3, for $18,984. Prepare the general journal entries to record the Year 1

depreciation and sale of the taxi in Year 3.

City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $22,800. In addition, City paid sales tax and title fees of $1,040 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,510. Required a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2 b&c. Assume that the taxi was sold on January 1, Year 3. for $18,984. Prepare the general journal entries to record the Year 1 depreciation and sale of the taxi In Year 3 Req A Req B and C Using the straight-line method, compute the depreciation expense whole dollar amount.) Year 1 Year 2 Depreciation expense Reg A Journal entry worksheet