Recording Asset Acquisition, Depreciation, and Disposal (FSET) On January 2, Year 1, Verdi Company acquired a machine for $420,000 cash. In addition to the purchase price, Verdi spent $8,750 cash for shipping and installation, and $12,250 cash to calibrate the machine prior to use. The company estimates that the machine has a useful life of 5 years and residual value of $34,125. 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 4. Verdi sold the machine to another company for $61,250. Balance Sheet Transaction Cash Asset Noncash Assets Contra Assets Liabilities Contributed Capital Earned Capital Revenues Expenses Income Statement Net Income a. Acquisition of machine (441,000) 441,000 0 b. First year depreciation 0 0 0 x 0 0 0 0 x 0 C. Sale of machine in Year 4 0 x 0 x 0 x 0 O 0 x 0 434,175 x 0 x 434,175 x 0 x