City Taxi Service purchased a new auto to use as a taxi on January $1,$ Year $1,$ for $$26,700.$ In addition, City paid sales tax and title fees of $$680$ for the vehicle. The taxi is expected to have a five$-$year life and a salvage value of $$5,460.$

Required

$6.$ Using the straight$-$line method, compute the depreciation expense for Year $1$ and Year $2$

Note: Round your answers to the nearest whole dollor amount.

b$.$ Assume the auto was sold on January $1,$ Year $3,$ for $$21,404.$ Determine the amount of gain or loss that would be recognlzed on the asset disposal.

Round the intermediate colculations to nearest whole dollar amount.