Exercise 8-11A (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 $23,800 In addition, City paid sales tax and title fees of $1,360 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,740 Required: o. Using the straight-line method, compute the depreciation expense for vear 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 $20,001. 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