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Acme Company commenced operations in 20Y1 and prepaid two expenses in 20Y1. On July 1, Acme paid $30,000 for an insurance policy that covers the

Acme Company commenced operations in 20Y1 and prepaid two expenses in 20Y1. On July 1, Acme paid $30,000 for an insurance policy that covers the 12-month period ending June 30, 20Y2. On December 1, Acme paid $60,000 for an advertising campaign that covers the 6-month period ending May 30, 20Y2. Acme's accountant correctly accounts for the prepaid expenses when preparing the income statement and balance sheet for 20Y1. However, when using the indirect method to prepare the operating activities section of the statement of cash flows for 20Y1, the accountant forgets to make adjustments for the effects of the changes in the balances of the two prepaid expense accounts. Unless these errors are corrected, the net cash provided by operating activities for 20Y1 will be: O $45,000 too low. O $65,000 too low. $65,000 too high. O $45,000 too high. O None of the above

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