Determine the amount of gain or loss

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Reference no: EM132219793

Question - City Taxi Service purchased a new auto to use as a taxi on January 1, 2018, for $36,000. In addition, City paid sales tax and title fees of $1,200 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $4,000.

Required -

a. Using the straight-line method, compute the depreciation expense for 2018 and 2019.

b. Assume the van was sold on January 1, 2020, for $21,000. Determine the amount of gain or loss that would be recognized on the asset disposal.

Reference no: EM132219793

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