City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $36,000. In addition, City paid sales tax and title fees of $1,200 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $4,000. Required a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2. b. Assume the auto was sold on January 1, Year 3, for $21,000. Determine the amount of gain or loss that would be recognized on the asset disposal. a. Your 1 Depreciation Year 2 Depreciation per year per year b on sale