Question $28$

$5$ pts

Acme Company commenced operations in $20Y1$ and prepaid two expenses in $20Y1.$ On July $1,$ Acme paid $$30,000$ for an insurance policy that covers the $12-$month period ending June $30,20$ Y $2.$ On December $1,$ Acme paid $$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 $20$Y$1.$ However, when using the indirect method to prepare the operating activities section of the statement of cash flows for $20$Y$1,$ 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:

$$ $$45,000$ too low.

$$65,000$ too high.

$$65,000$ too low.

$$45,000$ too high.

None of the aboveis