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On January 1. Year 1, the City Taxi Company purchased a new tax cab for $42,000. The cab has an expected salvage value of $4,000.

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On January 1. Year 1, the City Taxi Company purchased a new tax cab for $42,000. The cab has an expected salvage value of $4,000. The company estimates that the cab will be driven 200,000 miles over its life. It uses the units-of- production method to determine depreciation expense. The cab was driven 51,000 miles the first year and 53,700 the second year. What would be the depreciation expense reported on the Year 2 income statement and the book value of the taxi, respectively, at the end of Year 2

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