James & Younger Corporation purchased a one-year insurance policy in January 2017 for $42,000. The insurance policy is in effect from March 2017 through February 2018. If the company neglects to make the proper year-end adjustment for the expired insurance: a.) net income and assets will be understated by $35,000. b.) net income and assets will be overstated by $35,000. c.) net income and assets will be understated by $7,000. d.) net income and assets will be overstated by $7,000.