Question

PART I

Congratulations! You’ve just been hired as the new accounting associate in the accounting department at an athletic and sporting goods conglomerate, Outward Bound, Inc.! Your first task is to help ready Excel workpapers by creating the Adjusted Trial Balance that will ultimately be used for the basis of drafting the financial statements. To finalize the workpapers, you’ll need to complete the following for your senior associate to review:
Part I Deliverable Requirements:
1) Work in the AJE Tab and record any outstanding adjusting journal entries (AJEs) in good journal entry format based on the given information within this tab. Numerical data used in the AJEs should be cell-linked and/or formula driven as much as possible.

2) Work in the Trial Balances Tab and incorporate the AJEs you’ve made within the AJE Tab into the Adjusting Journal Entries table (columns G through I). All data input into the Adjusting Journal Entries table (i.e., columns G, H, and I) should be cell-linked from the AJEs you recorded in the AJE Tab.

3) Work in the Trial Balances Tab and use information from the Unadjusted Trial Balance and the Adjusting Journal Entries table to develop an Adjusted Trial Balance (in the table spanning columns K through N). All aspects (e.g., column titles, account balances, etc.) of the Adjusted Trial Balance should be cell-linked and/or formula driven. No part of the Adjusted Trial Balance table should be hard coded apart from the given heading and column titles.

Additionally, your manager, Artie, will be reviewing your work. You’ve heard Artie is a stickler for Excel formatting because organized documentation facilitates quality control goals and overall work efficiency. He requires his associates to prepare these two worksheets as follows:
• Both the Unadjusted Trial Balance and Adjusted Trial Balance within the Trial Balances Tab should include Validity Checks to demonstrate that each TB is in balance.

• Cell-links within a given Worksheet from another Tab (i.e., other Worksheets) should include a reference that is denoted with letters (or symbols) in colored font that is bolded.

• Artie dislikes typos and hates to see rows with zero balances displayed in Trial Balance tables.

• Artie likes succinct work; do not add additional worksheets to the workbook.

Evaluation Information:
• Your workpapers will be evaluated for informational accuracy, numerical accuracy, and formatting instructions to support overall work quality and to support the external audit.

PART II
Now that Artie has reviewed your AJE workpapers and corresponding Adjusted Trial Balance, it’s time to draft two of the financial statements: the Income Statement and the Balance Sheet.
Part II Deliverable Requirements:
1) Work in the Income Statement Tab and use information from the Trial Balances Tab to draft a Multi-step Income Statement.

2) Work in the Balance Sheet Tab and use information from the Trial Balances Tab to draft a Classified Balance Sheet.
Artie’s formatting requirements for the financial statements are as follows:
• All numerical data included in each of the financial statement tabs should be cell-linked and/or formula driven.

• There should be a Validity Check under the Balance Sheet to demonstrate that it is in balance.

• Artie dislikes typos and hates to see rows with zero balances displayed in financial statements.

• Artie likes succinct work; do not add additional worksheets to the workbook.
Extra:
• Although not required, Artie will be impressed with a Validity Check within the Income Statement Tab that reconciles the beginning balance of Retained Earnings to the ending balance of Retained Earnings.

Evaluation Information:
• Your workpapers will be evaluated for informational accuracy, numerical accuracy, and formatting instructions to support overall work quality and to support the external audit.

Answer 1

The student's task is to finalize accounting workpapers for an Adjusted Trial Balance and then use it to prepare financial statements like the Income Statement and Balance Sheet, adhering to strict Excel formatting and accuracy standards set by their manager.

Step-by-step explanation:

The question involves a student employed at Outward Bound, Inc., tasked with recording and finalizing adjusting journal entries (AJEs), incorporating them into a Trial Balance to create an Adjusted Trial Balance, and ultimately using this information to prepare financial statements. For Part I, the deliverables include recording AJEs, linking data to the Trial Balances Tab, and formatting the Unadjusted and Adjusted Trial Balances with necessary balancing checks. Adherence to Excel formatting rules set by the manager is essential.

For Part II, the student needs to use the Adjusted Trial Balance to draft a Multi-step Income Statement and a Classified Balance Sheet, with formatting that matches the guidelines provided. Numerical accuracy and adherence to the formatting instructions, including the avoidance of additional worksheets, are critical for the evaluation.

Note: The steps provided in the 'Work It Out' feature, which mentions calculating the merchandise balance and the current account balance, are not directly related to these deliverables but rather offer a method for calculating two components of the Balance of Payments, which is a different aspect of business and economic analysis.