In: Accounting
The Computer Warehouse sells computer hardware, software, and supplies (such as paper). Individual customers just walk into the store, select merchandise, and must pay for their purchases in full before leaving the store. Corporate customers, however, call in orders in advance, so that the items are waiting to be picked up. Corporate customers may charge their purchases to their account. The Computer Warehouse mails corporate customers monthly statements that summarize all purchases made the prior month. Corporate customers pay the entire balance, as listed on the monthly statement, with one check or EFT transaction.
The Computer Warehouse purchases its inventory from more than a dozen different vendors. Orders are placed via telephone, fax, or on the supplier’s Web site. Most orders are delivered the next day. Most orders are filled completely in one shipment, but sometimes a supplier is out of stock of a particular item. In such situations, the bulk of the order is shipped immediately and the out-of-stock item is shipped separately as soon as it arrives (such shipments of back orders are never combined with any new orders placed by the Computer Warehouse). The Computer Warehouse pays for some of its purchases COD but usually pays by the 10th of the month for all purchases made the prior month. None of its suppliers allows it to make installment payments.
Requirements (Only Q3 and Q4)
1. Draw an REA Diagram for Computer Warehouse revenue cycle, complete with cardinalities.
2. Draw an REA Diagram for Computer Warehouse expenditure cycle, complete with cardinalities.
3. Draw an integrated REA diagram for the above two cycles, complete with proper cardinalities.
4. Develop a set of tables to implement the integrated REA diagram you developed earlier for the Computer Warehouse in a relational database. Specify a primary key for each table, and suggest at least one other attribute that should be included in each table.