Use the Entertainment Centre Ltd. data in exercise 3-12 to make the company's closing entries at March 31, 2020. Then set up a T-account for Retained Earnings and post to that account. Compare Retained Earnings' ending balance to the amount reported on ECL's statement of retained earnings and balance sheet. What do you find? Why is this important?

Exercise 3-12

Entertainment Centre Ltd. reported the following data at March 31, 2020, with amounts adapted and in thousands:

You are the CFO responsible for reporting Entertainment Centre Ltd. (ECL) results. Use these data to prepare ECL's income statement for the year ended March 31, 2020, the statement of retained earnings for the year ended March 31, 2020, and the classified balance sheet at March 31, 2020. Use the report format for the balance sheet. Draw arrows linking the three statements to explain the information flows between the statements.

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Retained earnings, March 31, 2019. $ 1,300 Cost of goods sold... $126,000 Accounts receivable...... Net revenues Total current liabilities. All other expenses. Other current assets Other assets. 27,700 Cash......... 900 174,500 Property and equipment, net.. 7,200 53,600 Share capital.. 26.000 45,000 Inventories 33.000 4,800 Long-term liabilities 13,500 24,300 Dividends... 0