On March $1,2009,$ Mr$.$ Pickering and several relatives purchased $500,000$ shares in the company for $$1$ per

share. On that same day, the corporation borrowed $$300,000$ from the local bank. The bank note required

five annual $$60,000$ principal repay$-$ ments beginning March $1,2010.$ Interest payments of $6\%$ of the

outstanding balance on the previous March $1$ were required on March $1$ of each year, also beginning

March $1,2010.$ The firm then wrote a check for $$525,000$ to buy the $65$ acres of land that included Verona

Springs.

The water was nearly free of pollutants, but it arose into a small pond before flow$-$ ing to a nearby stream.

In the pond, the water was exposed to falling leaves and other contaminants. To maintain purity, Mr$.$

Pickering hired a local firm to drill a flowing artesian well near the spring $($in a flowing artesian well,

pressure from an underground aquifer forces water to flow naturally to the surface$).$ The company paid

$$1,000$ cash for the drilling on March $10,2009.$ Mr$.$ Pickering expected the well to last at least $10$ years

before redrilling would be needed.

During March, Verona Springs had a building constructed above and around the well. Inside the building,

the firm installed filtration, purification, and bottling equip$-$ ment and a holding tank. The company paid

the $$240,000$ cost by check on March $31,2009,$ when the equipment became operational. The firm

expected the building and equipment to last $10$ years. On April $5,$ the firm purchased a truckload of $18,200$

one$-$ gallon plastic water bottles and lids for $$3,200,$ and $3,100$ shipping boxes for $$3,100($ $$1\mathrm{.}00$ per box$).$

The $$6,300$ for those purchases was payable in $30$ days. During April, the firm also purchased

miscellaneous supplies for $$500$ and paid in cash.

The firm began bottling water by hiring three local residents to work part$-$time. During April, they bottled

and shipped $18,000$ gallons of mineral water $(3,000$ cases that each contained six $1-$gallon bottles$).$ Verona

sold the $3,000$ cases to regional su$-$permarkets for $$5\mathrm{.}00$ per case. One chain paid for $1,000$ cases by

check upon receipt; the others purchased on account, payable in $30$ days. In late April, the firm paid the

three employees a total of $$1,500$ in cash for their work and also paid a trucking firm $$900$ in cash to

deliver the water. On April $30,$ the firm had negligible quantities of bottles, lids, boxes, and supplies in

inventory.

Required

For the two$-$month period March $1,2009,$ to April $30,2009,$ prepare $($a$)$ journal entries, $($b$)$ an income

statement, $($c$)$ a balance sheet, and $($d$)$ a statement of cash flows.