Bugs-Be-Gone sells two types of screen doors. Model A, which sells for \(\$ 30\), is the basic screen door and Model B, for \(\$ 50\), is the deluxe screen door. At the beginning of July, the business had a balance in its Cash account of \(\$ 1600\) and an inventory consisting of 12 units of Model A costing \(\$ 20\) each and 15 units of Model B costing \$35 each. During July it made the following purchases and sales of inventory.

All purchases and sales are for cash. The business has a perpetual inventory system using bar codes to verify each sale. For the 20 July sales, three units of Model A were from the beginning inventory, and seven were units purchased on 13 July; five units of Model B were from the beginning inventory, and seven were units purchased on 13 July. For the 29 July sales, one unit of Model A was purchased on 13 July, and six were units purchased on 24 July; one unit of Model B was purchased on 13 July, and two were units purchased on 24 July.
On 31 July, the business counted its inventory and determined that it had three units of Model A and six units of Model B on hand. However, one of the three units of Model A was run over by a customer's truck and had to be thrown away. This unit had been in the beginning inventory.
Required:
a Record the beginning balances in the Cash and Inventory accounts. Using account columns (use one account column for Inventory), record the purchases and sales transactions during July and calculate the ending balances of all the accounts you used.
b Record the disposal of the damaged unit and prove the accuracy of the ending balance in the Inventory account.
c Calculate the gross profit percentage. How was this affected by the damaged inventory?
d Do you think your work would have been easier if you had used two Inventory accounts in (a)? How do you think a business with many items of inventory keeps track of these items under a perpetual inventory system?

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6 July 13 20 24 29 Sales Purchases Sales Purchases Sales Model A 8 units @ $30 each 9 units @ $19 each 10 units @ $30 each 7 units @ $21 each 7 units @ $30 each Model B 10 units @ $50 each 10 units @ $36 each 12 units @ $50 each 6 units @ $37 each 3 units@ $50 each