Expand Your Critical Thinking 2-06 a1-a2, b-d (Part Level Submission) Dyanna Craig operates Craig Riding Academy. The academy's primary sources of revenue are riding fees and lesson fees, which are paid on a cash basis. Dyanna 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 the following accounts: Cash, Accounts Receivable, and Service Revenue. The academy owns 10 horses, a stable, a riding corral, riding equipment, and office equipment. These assets are accounted for in these accounts: Horses Buildings, and Equipment. The academy also maintains the following accounts: Supplies, Prepaid Insurance, Accounts Payable. Salaries and Wages Expense, Advertising Expense, Utilities Expense, and Maintenance and Repairs Expense. Dyanna pays periodic cash dividends to stockholders. To record stockholders equity in the business and dividends, three accounts are maintained: Common Stock, Retained Earnings, and Dividends. During the first month of operations, an inexperienced bookkeeper was employed. Dyanna Craig 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. Date Account Titles and Explanation Debit Credit May Cash Common Stock (Issued common stock for $18,000 cash) 5 Cash Service Revenue (Received $250 cash for lessons provided) 7 Cash Service Revenue (Received $300 for boarding of horses beginning June 1) 14 Equipment Cash (Purchased desk and other office equipment for $800 cash) 15 Salaries and Wages Expense Cash (Issued dividend checks to stockholders) 20 Cash Service Revenue (Received $184 cash for riding fees) 30 Maintenance and Repairs Expense Accounts Payable (Received bill of 575 from carpenter for repair services performed) 31 Supplies Cash (Purchased an estimated 2 months' supply of feed and hay for $1,700 on account) Answer the following. (c) x Your answer is incorrect. Try again. What was the correct net income for May, assuming the bookkeeper reported net income of $4,500 after posting all 50 entries? (Errors only occur on the eight entries above.) Correct net income 2384