Question $1$:

$($entity not a registered VAT vendor$)$

The Gallery, an exclusive out selling original works of art, started trading on $1$ February $2018.$

On $5$ February, The Gallery purchased inventory of two artworks on credit from Art Dealers Limited at a cost of C$1000.$ Artwork A cost C$600$ and artwork B cost C$400.$ Art Dealers Limited allows a settlement discount of $4\%$ if payment is made within ten days. The Gallery paid the amount owing on $10$ February $2018.$

On $15$ February $2018,$ The Gallery sold artwork A on credit to Mr Aye for a selling price of C$780.$ On $20$ February, The Gallery sold artwork B on credit to Mr Bee for a within ten days. selling price of C$520.$ A settlement discount of $5\%$ is allowed if payment is received within ten days.

The full amount owing by Mr Aye was received on $20$ February $2018$ and the full amount owing by Mr Bee was received on $5$ March $2018.$

Operating expenses for the two$-$month period from $1$ February to $31$ March $2018$ amounted to C$101.$

The Gallery uses a perpetual inventory system. As there are a relatively small number of customers, the entity does not use an accounts receivable subsidiary ledger.

It is probable that The Gallery, Mr Aye and Mr Bee will all take up the settlement discounts offered.

You are required to:

a$.$ Prepare all the journal entries in the accounting records of The Gallery for the months of February and March $2018.$

b$.$ Calculate the balance on the accounts receivable account at $28$ February $2018.$