(Error Analysis) When the records of Debra Hanson Corporation were reviewed at the close of 2008, the errors listed below were discovered. For each item indicate by a check mark in the appropriate column whether the error resulted in an overstatement, an understatement, or had no effect on net income for the years 2007 and 2008.

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Item 1. Failure to record amortization of patent in 2008. 2. Failure to record the correct amount of ending 2007 inventory. The amount was understated because of an error in calculation. 3. Failure to record merchandise purchased in 2007. Merchandise was also omitted from ending inventory in 2007 but was not yet sold. 4. Failure to record accrued interest on notes payable in 2007; that amount was recorded when paid in 2008. 5. Failure to reflect supplies on hand on balance sheet at end of 2007. 2007 2008 Over- statement Under- statement No Effect Over- statement Under- statement No Effect