Impact of Errors on Income Statement Trinity Company discovered the following errors in Year 2. Required a. Indicate how each item would impact net income in Year 1 (overstatement, understatement, or no effect). b. Indicate how each item would impact net income in Year 2 (overstatement, understatement, or no effect) 1. Interest expense of $3,000 was not accrued at the end of Year 1. Amount was paid and expensed in Year 2 instead. 2. Supplies account at the end of Year 1 was not adjusted for supplies used. The supplies account was reduced in Year 2. 3. An error in the input of salvage values and useful lives into the depreciation system resulted in an overstatement of depreciation expense by $5,000 in Year 1 . Depreciation expense was calculated correctly in Year 2. 4. A $5,000 accrual for vacation earned in Year 1 (but taken in Year 2) was not included in the financial statements in Year 1. 5. The insurance premium of $800 covering Year 2, and paid in December of Year 1 was expensed in Year 1