Apply Ians Place Case Study Read Case Study 7 20 Ians Place

Apply Ians Place Case Studyreadcase Study 7 20ians Place The Rea

Apply: Ian's Place Case Study Read Case Study 7-20 Ian's Place (The REA Model and E-R Diagrams) on p. 238 in Core Concepts of Accounting Information Systems. Write a 45- to 175-word response to question 1. Complete the items identified for questions 2 and 3. Case Analyses 7-20. Ian's Place (The REA Model and E-R Diagrams) Ian's place sells pet supplies to dog and cat owners. To sell its products, the marketing department requires sales personnel to call on the pet store retailers within their assigned geographic territories. Salespeople have an application on their mobile phones that allows them to record sales orders and send these sales orders directly to the company network for updating the company's sales order file. Each day, warehouse personnel review the current sales orders in its file, and where possible, pick the goods and ready them for shipment. (Ian's Place ships goods via common carrier, and shipping terms are generally FOB from the shipping point.) When the shipping department completes a shipment, it also notifies the billing department, which then prepares an invoice for the customer. Payment terms vary by customer, but most are “net 30.†When the billing department receives a payment, the billing clerk credits the customer's account and records the cash received. Requirements 1. Identify the resources, events, and agents involved in the revenue process at Ian's Place. 2. Develop an E-R diagram for this process. 3. Design the tables for this revenue process. Note that you will need tables for each resource, event, and agent, as well as tables for each many-to-many relationship.

Paper For Above instruction

Introduction

The revenue process at Ian's Place involves several key resources, events, and agents that facilitate the flow of sales from order placement to cash receipt. Understanding these components and their relationships is essential for designing an effective E-R diagram and database schema aligned with the REA (Resources, Events, Agents) model, which supports accurate and efficient accounting information systems.

Resources, Events, and Agents in Ian's Place Revenue Process

The primary resources involved include inventory (pet supplies), customer accounts, and cash. The main events encompass order placement, shipment, invoicing, and payment receipt. Agents comprise sales personnel, warehouse staff, shipping personnel, billing clerks, and customers.

Sales personnel (agents) initiate the sales process by recording sales orders via mobile application, representing the sales event. Warehouse staff (agents) execute the order fulfillment event by selecting and preparing goods for shipment. The shipping event involves shipping personnel who coordinate the delivery of goods via common carrier. The billing event involves billing clerks generating invoices once shipments are completed. Finally, the cash collection event occurs when customers make payments, which are recorded by billing clerks.

Development of the E-R Diagram

The E-R diagram begins with entities representing resources such as Customer, InventoryItem, and Cash. Events are represented as SalesOrder, Shipment, Invoice, and Payment. Agents include SalesPerson, WarehouseStaff, ShippingPersonnel, and BillingClerk. Relationships connect these entities; for instance, a SalesPerson creates many SalesOrders, a SalesOrder results in one Shipment, which leads to an Invoice, and Payments are linked to Invoices.

Many-to-many relationships arise, for example, between SalesOrders and InventoryItems, as multiple items can be ordered in a single transaction, and each item can appear in multiple orders. These are resolved through associative tables capturing the quantity and price details.

Database Tables Design

Tables for core entities include:

- Customers (CustomerID, Name, ContactInfo, PaymentTerms)

- InventoryItems (ItemID, Description, Price, QuantityOnHand)

- SalesPersons (SalesPersonID, Name, Territory)

- WarehouseStaff (StaffID, Name)

- ShippingPersonnel (StaffID, Name)

- BillingClerks (ClerkID, Name)

- Cash (CashID, Amount, Date)

Event tables:

- SalesOrders (OrderID, CustomerID, SalesPersonID, OrderDate)

- Shipment (ShipmentID, OrderID, ShipDate, Carrier, ShippingTerms)

- Invoice (InvoiceID, ShipmentID, InvoiceDate, AmountDue)

- Payment (PaymentID, InvoiceID, PaymentDate, AmountPaid)

Associative tables for many-to-many relationships:

- SalesOrderLine (OrderID, ItemID, Quantity, UnitPrice)

- ShipmentDetails (ShipmentID, ItemID, QuantityShipped)

This structure ensures comprehensive tracking of the revenue process, supports reporting, and maintains data integrity.

Conclusion

Applying the REA model to Ian's Place facilitates an organized, accurate representation of its revenue cycle. By delineating resources, events, and agents and their relationships, the company can enhance its accounting systems for better decision-making, internal controls, and compliance.

References

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