Refer to Problems 1 and 2 for information about the revenue and expenditure cycles for the...

Refer to Problems 1 and 2 for information about the revenue and expenditure cycles for the Computer Warehouse and use that information to draw an integrated REA diagram for both cycles.

Problem 1

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.

REQUIRED

Draw an REA diagram of the Computer Warehouse’s revenue cycle, complete with cardinalities.

Problem 2

The Computer Warehouse purchases its inventory from more than a dozen different vendors. Orders are placed via telephone, fax, or on the supplier’s website. 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 C.O.D. but usually pays by the 10th of the month for all purchases made the prior month. None of its suppliers allow it to make installment payments.

REQUIRED

Draw an REA diagram of the Computer Warehouse’s expenditure cycle, complete with cardinalities.