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Sandhill Company's December 31 year-end financial statements contained the following errors: An insurance premium of $73500 was prepaid in 2023, covering the years 2023, 2024,

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Sandhill Company's December 31 year-end financial statements contained the following errors: An insurance premium of $73500 was prepaid in 2023, covering the years 2023, 2024, and 2025. The prepayment was recorded with a debit to insurance expense. In addition, on December 31, 2024, fully deprciated machinery was sold for $46500 cash, but the sale was not recorded unti1 2025. There were no other errors during 2024 or 2025, and no correctlons have been made for any of the errors. Ignore income tax considerations. What is the total net effect of the errors on Sandhill's 2024 net income? Net income is overstated by $39000. Net income is overstated by $77000. Net income is overstated by $70500. Net income is understated by $52500

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