a. Calculate the gross margin, gross margin ratio, and inventory turnover ratio at December 31, 2016, for:
b. During the December 20, 2016, inventory count at Chicoutimi , $75,000 of inventory shrinkage was identified. It had not been recorded in the inventory account.
i. Prepare the entry to record the inventory shrinkage of $75,000.
ii. Recalculate Chicoutimi gross margin, gross margin ratio, and inventory turnover ratio after the adjusting journal entry is made.
iii. Describe what happened to Chicoutimi gross margin ratio and inventory turnover ratio after adjusting for the inventory shrinkage.
c. Which company do you think is better at managing inventory? Explain your answer.