Dinosaur Junior Corporation Purchased a One-Year Insurance Policy in January

Dinosaur Junior Corporation purchased a one-year insurance policy in January 2015 for $75,000. The insurance policy is in effect from May 2015 through April 2016. If the company neglects to make the proper year-end adjustment for the expired insurance

A) net income and assets will be understated by $50,000.
B) net income and assets will be overstated by $50,000.
C) net income and assets will be understated by $25,000.
D) net income and assets will be overstated by $25,000.