rief Exercise $8-4($Algo$)$ Depreciation expense using the units$-$of$-$production method LO $8-4$

Clean Air Company makes and sells cloth masks. The company purchased a new automated sewing machine at the beginning of Year $1$ for $$73,000.$ The machine is expected to have a two$-$year useful life and a $$20,300$ salvage value. The expected mask production is estimated at $105,400$ masks. Actual mask production for the two years was as follows:

Year $158,000$Year $251,000$Total$109,000$

Required:

Compute the depreciation expense for each of the two years, using units$-$of$-$production depreciation.

Required:

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.

Assume the auto was sold on January $1,$ Year $3,$ for $$19,539.$ 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.