James Corporation purchased a one-year insurance policy in January 2010 for $48,000. The insurance policy is in effect from May 2010 through April 2011. If the company neglects to make the proper year-end adjustment for the expired insurance Net income and assets will be overstated by $32,000. Net income and assets will be overstated by $16,000. Net income and assets will be understated by $32,000. Net income and assets will be understated by $16,000