CALCULATOR FULL SCREEN PRINTER VERSION BACK NEX Expand Your Critical Thinking 3-07 (Part Level Submission) Sarah Morrow operates Blossom Riding Academy, Inc. The academy's primary sources of revenue are riding fees and lesson fees, which are provided on a cash basis. Sarah also boards horses for owners, who are billed monthly for boarding fees. In a few cases, boarders pay in advance of expected use. For its revenue transactions, the academy maintains these accounts: Cash, Accounts Receivable, Uneamed Service Revenue, and Service Revenue The academy owns 10 horses, a stable, a riding corral, niding equipment, and office equipment. These assets are accounted for in the following accounts: Horses, Buildings, and Equipment The academy employs stable helpers and office employee who receive weekly salaries. At the end of each month, the mail Usually brings bills for advertising, utilities, and veterinary service Other expenses Indude feed for the horses and insurance. For its expenses, the academy at the following accounts: Supplies, Prepaid Insurance, Accounts Payable, Salaries and Wages Expense, Advertising Expense, Utilities Expense, Maintenance and Repairs Expense, Supplies Expense, and Insurance Expense. Sarah's sole source of personal income is dividends from the academy. Thus, the corporation declares and prys periodic dividends. To account for stockholders' equity in the business and dividends, two accounts are maintained: Common Stock and Dividends. During the first month of operations, an inexperienced bookkeeper was employed. Sarah asks you to review the following eight entries of the 50 entries made during the month. In each case, the explanation for the entry is correct. May 1 Cash 18,000 Untamed Service Revenue 18,000 (Issued common stock in exchange for $18,000 cash) 5 Cash 300 Service Revenue (Received $300 cash for lesson fees) Cash 600 Service Revenue 600 (Received 5600 for boarding of horses beginning June 1) 9 Supplies Expense 1,500 Cash 1,800 (Purchased estimated 5 months supply of feed and hay for $1,800 on account) 300 7 oor Pridry on on 5 300 300 7 600 600 9 1,800 1,800 14 100 Cash Service Revenue (Received $300 cash for lesson fees) Cash Service Revenue (Received $600 for boarding of horses beginning June 1) Supplies Expense Cash (Purchased estimated 5 months' supply of feed and hay for $1,800 on account) Equipment Cash (Purchased desk and other office equipment for $1,000 cash) 15 Salaries and Wages Expense Cash (Issued check to Sarah Morrow for personal use) 20 Cash Service Revenue (Received $185 cash for riding fees) 31 Maintenance and Repairs Expense Accounts Receivable (Received bill of $90 from carpenter for repair services performed) Answer the following. 1,000 480 480 176 185 90 90 Your answer is correct. For each journal entry that is correct, so state. Date May 1 Incorrect May 5 Correct May 7 Incorrect May 9 Incorrect May 14 Incorrect May 15 Incorrect May 20 Incorrect May 31 Incorrect Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS SHOW ANSWER CES For each journal entry that is incorrect, prepare the entry that should have been made by the bookkeeper. (Credit account th. not Indent manually. Record Journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit May 1 May 5 4 May 7 May 9, May 14 udy. May 15