1. For the two-month period March 1, 2009, to April 30, 2009, prepare
(a) Journal entries.
(b) An income statement.
(c) A balance sheet.
(d) A statement of cash flows.
2. Evaluate the company’s performance.
3. Is the large decline in cash a concern?
4. How would the three financial statements change if Verona Springs bought 5,100 boxes for $ 5,100 ($ 1.00 per box) and if 2,000 boxes remained in inventory?
5. How would the three financial statements change if, in addition to paying a total of $ 5,100 for boxes, Verona Springs also spent a total of $ 4,800 for bottles and lids (a total of $ 9,900 for boxes, bottles, and lids, instead of $ 6,300), $ 2,500 instead of $ 1,500 for labor, $ 1,600 instead of $ 900 for shipping, and then shipped a total of 5,000 cases at $ 5.00 per case (1,000 cases for cash; 4,000 cases on credit)? Also assume negligible quantities of boxes, bottles, lids, and supplies in inventory.
6. Identify costs that may not have been included in the case.
In February 2009, Mr. Alan Pickering contracted to purchase a mineral spring in the Missouri Ozarks. The property, known locally as Verona Springs, included a 6 million gallon-per-day spring that produced exceptionally pure water. Mr. Pickering planned to bottle the water and sell it in the nearby cities of Springfield, Columbia, St. Louis, and Kansas City.