Recording Asset Acquisition, Depreciation, and Disposal $($FSET$)$

On January $2,$ Year $1,$ Verdi Company acquired a machine for $$288,000$ cash. In addition to the purchase price, Verdi spent $$6,000$ cash for

shipping and installation, and $$8,400$ cash to calibrate the machine prior to use. The company estimates that the machine has a useful

life of $4$ years and residual value of $$23,400.$

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 $3.$ Verdi sold the machine to another company for

$$42,000.$