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City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $23,900. In addition, City paid sales tax
City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $23,900. In addition, City paid sales tax and title fees of $1,320 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,130. 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 $19,762. 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
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