On January 2, Year 1, Verdi Company acquired a machine for $120,000 cash. In addition to the purchase price, Verdi spent $2,500 cash for shipping and installation, and $3,500 cash to calibrate the machine prior to use. The company estimates that the machine has a useful life of 6 years and residual value of $9,750. Use the financial statement effects template to show how the following activities affect the balance sheet and income statement: a. Acquisition of the machine including all costs incurred to prepare it for its intended use. b. Depreciation in the first year. Verdi uses the straight-line method of depreciation. c. Sale of the machine on December 31, Year 5. Verdi sold the machine to another company for $17,500.