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On March 1 , 2 0 0 9 , Mr . Pickering and several relatives purchased 5 0 0 , 0 0 0 shares in
On March Mr Pickering and several relatives purchased shares in the company for $ per share. On that same day, the corporation borrowed $ from the local bank. The bank note required five annual $ principal repay ments beginning March Interest payments of of the outstanding balance on the previous March were required on March of each year, also beginning March The firm then wrote a check for $ to buy the 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 $ cash for the drilling on March Mr Pickering expected the well to last at least 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 $ cost by check on March when the equipment became operational. The firm expected the building and equipment to last years. On April the firm purchased a truckload of one gallon plastic water bottles and lids for $ and shipping boxes for $ $ per box The $ for those purchases was payable in days. During April, the firm also purchased miscellaneous supplies for $ and paid in cash. The firm began bottling water by hiring three local residents to work parttime. During April, they bottled and shipped gallons of mineral water cases that each contained six gallon bottles Verona sold the cases to regional supermarkets for $ per case. One chain paid for cases by check upon receipt; the others purchased on account, payable in days. In late April, the firm paid the three employees a total of $ in cash for their work and also paid a trucking firm $ in cash to deliver the water. On April the firm had negligible quantities of bottles, lids, boxes, and supplies in inventory. Required For the twomonth period March to April prepare a journal entries, b an income statement, c a balance sheet, and d a statement of cash flows.
On March Mr Pickering and several relatives purchased shares in the company for $ per
share. On that same day, the corporation borrowed $ from the local bank. The bank note required
five annual $ principal repay ments beginning March Interest payments of of the
outstanding balance on the previous March were required on March of each year, also beginning
March The firm then wrote a check for $ to buy the 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
$ cash for the drilling on March Mr Pickering expected the well to last at least 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 $ cost by check on March when the equipment became operational. The firm
expected the building and equipment to last years. On April the firm purchased a truckload of
one gallon plastic water bottles and lids for $ and shipping boxes for $ $ per box
The $ for those purchases was payable in days. During April, the firm also purchased
miscellaneous supplies for $ and paid in cash.
The firm began bottling water by hiring three local residents to work parttime. During April, they bottled
and shipped gallons of mineral water cases that each contained six gallon bottles Verona
sold the cases to regional supermarkets for $ per case. One chain paid for cases by
check upon receipt; the others purchased on account, payable in days. In late April, the firm paid the
three employees a total of $ in cash for their work and also paid a trucking firm $ in cash to
deliver the water. On April the firm had negligible quantities of bottles, lids, boxes, and supplies in
inventory.
Required
For the twomonth period March to April prepare a journal entries, b an income
statement, c a balance sheet, and d a statement of cash flows.
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