Recording Asset Acquisition, Depreciation, and Disposal (FSET) On January 2, Year 1, Verdi Company acquired a machine for $480,000 cash. In addition to the purchase price, Verdi spent $10,000 cash for shipping and installation, and $14,000 cash to calibrate the machine prior to use. The company estimates that the machine has a useful life of 3 years and residual value of $39,000. 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 2. Verdi sold the machine to another company for $70,000. Balance Sheet Transaction Cash Asset Noncash Assets Contra Assets Liabilities Contributed Capital Earned Capital Revenues Income Statement Expenses Net Income a. Acquisition of machine (504,000) 504,000 0 0 b. First year depreciation 0 C. Sale of machine in Year 4 70,000 (465,000) x 155,000 (465,000) x 0 0 x 155,000 0 x 0 70,000 x 0 155,000 x 0x