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Expand Your Critical Thinking 3-7 Saira Morrow operates Dressage Riding Academy, Inc. The academy's primary sources of revenue are riding fees and...
Expand Your Critical Thinking 3-7
Saira Morrow operates Dressage Riding Academy, Inc. The academy's primary sources of revenue are riding fees and lesson fees, which are provided on a cash basis. Saira 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, Unearned Service Revenue, and Service Revenue.
The academy owns 10 horses, a stable, a riding corral, riding equipment, and office equipment. These assets are accounted for in the following accounts: Horses, Buildings, and Equipment.
The academy employs stable helpers and an 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 include feed for the horses and insurance. For its expenses, the academy maintains 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.
Saira's sole source of personal income is dividends from the academy. Thus, the corporation declares and pays 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. Saira 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
11,100
Unearned Service Revenue
11,100
(Issued common stock in exchange for $11,100 cash)
5
Cash
190
Service Revenue
190
(Received $190 cash for lesson fees)
7
Cash
370
Service Revenue
370
(Received $370 for boarding of horses beginning June 1)
9
Supplies Expense
1,110
Cash
1,110
(Purchased estimated 5 months' supply of feed and hay for $1,110 on account)
14
Equipment
60
Cash
600
(Purchased desk and other office equipment for $600 cash)
15
Salaries and Wages Expense
300
Cash
300
(Issued check to Saira for personal use)
20
Cash
105
Service Revenue
114
(Received $114 cash for riding fees)
31
Maintenance and Repairs Expense
55
Accounts Receivable
55
(Received bill of $55 from carpenter for repair services performed)
Answer the following.
Your answer is correct.
For each journal entry that is correct, so state.
DateMay
1
select between correct and incorrect
Correct
Incorrect
May
5
select between correct and incorrect
Incorrect
Correct
May
7
select between correct and incorrect
Incorrect
Correct
May
9
select between correct and incorrect
Incorrect
Correct
May
14
select between correct and incorrect
Incorrect
Correct
May
15
select between correct and incorrect
Correct
Incorrect
May
20
select between correct and incorrect
Incorrect
Correct
May
31
select between correct and incorrect
Correct
Incorrect
SHOW LIST OF ACCOUNTS
LINK TO TEXT
LINK TO TEXT
Your answer is correct.
For each journal entry that is incorrect, prepare the entry that should have been made by the bookkeeper. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Date
Account Titles and Explanation
Debit
Credit
choose a transaction date
May 1
May 5
May 7
May 9
May 14
May 15
May 20
May 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date
May 1
May 5
May 7
May 9
May 14
May 15
May 20
May 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date
May 1
May 5
May 7
May 9
May 14
May 15
May 20
May 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date
May 1
May 5
May 7
May 9
May 14
May 15
May 20
May 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date
May 1
May 5
May 7
May 9
May 14
May 15
May 20
May 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date
May 1
May 5
May 7
May 9
May 14
May 15
May 20
May 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date
May 1
May 5
May 7
May 9
May 14
May 15
May 20
May 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
Your answer is incorrect. Try again.
What was the correct net income for May, assuming the bookkeeper originally reported net income of $3,330 after posting all 50 entries?
Correct net income$enter the correct net income in dollars
Your answer is incorrect. Try again.
What was the correct cash balance at May 31, assuming the bookkeeper reported a balance of $9,230 after posting all 50 entries?
Correct cash balance$enter the correct cash balance in dollars
