Exercise $8-11$B Events related to the acquisition, use, and disposal of a tangible plant

asset: straight$-$line depreciation

Pete's Pizza purchased a delivery van on January $1,$ Year $1,$ for $$35,000.$ In addition, Pete's paid sales tax and title fees of $$1,500$ for the van. The van is expected to have a four$-$year life and a salvage value of $$6,500.$

Required

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

b$.$ Assume the van was sold on January $1,$ Year $4,$ for $$21,000.$ Determine the amount of gain or loss that would be recognized on the asset disposal.