City Taxi Service purchased a new auto to use as a taxi on January $1,$ Year $1,$ for $$27,300.$ In addition, City paid sales tax and

title fees of $$1,380$ for the vehicle. The taxi is expected to have a five$-$year life and a salvage value of $$5,190.$

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 $$22,177.$ Determine the amount of gain or loss that would be

recognized on the asset disposal.

Round the intermediate calculations to nearest whole dollar amount.