Errors will have a $2,300 overstatement of net income on revenues, costs, and net income.
The amount earned by an individual or business after costs, allowances, and taxes is referred to as net income. Net income in the company is the amount that remains after all costs, such as salaries and wages, the cost of goods or raw materials, and taxes, have been paid.
Net income = Total revenue - total expenses
where,
Total revenue = Unearned revenue = $4,200
Total Expense = Supplies expense + insurance expense = $1,500 + $5,000 = $6,500
Net Income = Total revenue - Total Expenses = $4,200 - $6,500
Net Income = -$2,300
Therefore, there's an overstatement of $2300 in Net Income.
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