Exercise $8-11$A $($Algo$)$ Events related to the acquisition, use, and disposal of a tangible plant asset: Straight$-$line depreciation LO $8-2,8-5$

City Taxi Service purchased a new auto to use as a taxi on January $1,$ Year $1,$ for $$26,000.$ In addition, City paid sales tax and title fees of $$970$ for the vehicle. The taxi is expected to have a five$-$year life and a salvage value of $$6,590.$

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 $$21,641.$ 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.

$\backslash$table$[[$a$.,$Year $1$ Depreciation,,per year$],[$a$.,$Year $2$ Depreciation,,per year$],[$b$.,$Gain,on sale,$]]$