The following information was taken from the accounting records of Pembroke Ltd. and Deep River Ltd. at October 31, 2020. The two companies are competitors.

		Pembroke Ltd.		Deep River Ltd.
Ending inventory, Oct. 31, 2019		$ 399,000		$ 157,000
Ending inventory, Oct. 31, 2020		294,000		466,000
Cost of goods sold, 2020		5,613,300		4,392,150
Sales for 2020		7,484,400		7,320,250

Calculate the gross margin, gross margin ratio, and inventory turnover ratio at October 31, 2020, for: i. Pembroke Ltd. ii. Deep River Ltd. (Round inventory turnover ratio to 1 decimal place, e.g. 10.1.)

		Pembroke Ltd.			Deep River Ltd.
Gross margin		$ Enter a dollar amount.			$ Enter a dollar amount.
Gross margin ratio		Enter percentages.	%		Enter percentages.	%
Inventory turnover ratio		Enter a number of times rounded to 1 decimal place.	times		Enter a number of times rounded to 1 decimal place.	times

eTextbook and Media

List of Accounts

During the December 31, 2020, inventory count at Deep River Ltd., $ 82,000 of inventory shrinkage was identified. It has not been recorded in the inventory account. i. Prepare the entry to record the inventory shrinkage of $ 82,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account and explanation	Debit	Credit
Enter an account title.	Enter a debit amount.	Enter a credit amount.
Enter an account title.	Enter a debit amount.	Enter a credit amount.

ii. Recalculate Deep Rivers gross margin, gross margin ratio, and inventory turnover ratio after the adjusting journal entry is made. (Hint: You need to adjust the ending inventory balance for 2020 and the cost of goods sold.) (Round gross margin ratio to 1 decimal place, e.g. 10.5% and inventory turnover ratio to 1 decimal place, e.g. 8.5.)

		Deep River Ltd.
Gross margin		$ Enter a dollar amount.
Gross margin ratio		Enter percentages rounded to 1 decimal place.	%
Inventory turnover ratio		Enter a number of times rounded to 1 decimal place.	times

eTextbook and Media

List of Accounts