To create the surface water press the ‘R’ key to access the Rectangular Selection tool or go to the Tools (4) palette and chose the middle (square) icon in the bottom row.  The bottom 1/3 of your painting should look something like this (5).  Press the 'F' key and click once inside the selection to turn it into a floater.

Already we can begin to run into confusion with our painting.  When we look at our list of floaters in the Objects:Floater List palette (6) and see Floaters 1,2 and 3 listed, In a few minutes we will have 3 or 4 more floater added to this list.  Double click on the blue bar named Floater 1.  The Floater Attributes dialog box (7) will appear.  Type in the word Sky and click OK.  Name the others Mountan and Surface.