what is the simple subject on
all the horses on the carousel were colorful

See

http://www.grammar-monster.com/glossary/simple_subject.htm

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NEED TO KNOW IF IS A SIMPLE SUBJECT OR COMPOUND SUBJECT COMPLEMENT

what is the simple subject on
all the horses on the carousel were colorful

Hmm, Compound Subject Complement?

The subject of your sentence is "horses," or "all the horses." Take your pick.