Star Garage Limited provides motor vehicle accessories and services for a wide range of vehicles in Dominica. Customers purchase parts to take to their individual mechanics to complete vehicle repairs or they may choose to bring their vehicles to Star Garage for in-house repairs and servicing. This means that they pay for both the parts and the labour associated with the type of service required. Some services do not include any new parts, just the labour costs for that service. Individual customers must pay for all parts purchases in full at the time of sale. Individual customers must pay 50% down when they bring their vehicles in for servicing and pay the balance when they come to pick them up when the job is completed. Corporate customers, however, are billed monthly for all sales (parts or service). Although Star Garage Limited has several different banking accounts, all sales are deposited intact into its main chequing account. Star Garage Limited purchases its inventory of parts from more than a dozen different vendors. Orders are usually delivered the next day; sometimes, however, suppliers ship only partial orders. Star garage Limited pays cash for some of its purchases, but usually pays by the 8th of the month for all purchases made the prior month. None of its suppliers allows it to make installment payments. Required: 1. Draw an integrated REA diagram for Star Garage’s Limited revenue and expenditure cycles. 2. Star Garage Limited often buys inventory after receiving a sales order from the customer. Suppose you are asked to prepare one REA diagram that combines both the sales and collection process and the purchases and payments process. What would be shared among those processes? What would be unique to each process? Why?
Star Garage Limited provides motor vehicle accessories and services for a wide range of vehicles in
Dominica. Customers purchase parts to take to their individual mechanics to complete vehicle repairs or
they may choose to bring their vehicles to Star Garage for in-house repairs and servicing. This means
that they pay for both the parts and the labour associated with the type of service required. Some
services do not include any new parts, just the labour costs for that service. Individual customers must
pay for all parts purchases in full at the time of sale. Individual customers must pay 50% down when
they bring their vehicles in for servicing and pay the balance when they come to pick them up when the
job is completed. Corporate customers, however, are billed monthly for all sales (parts or service).
Although Star Garage Limited has several different banking accounts, all sales are deposited intact into
its main chequing account.
Star Garage Limited purchases its inventory of parts from more than a dozen different vendors. Orders
are usually delivered the next day; sometimes, however, suppliers ship only partial orders. Star garage
Limited pays cash for some of its purchases, but usually pays by the 8th of the month for all purchases
made the prior month. None of its suppliers allows it to make installment payments.
Required:
1. Draw an integrated REA diagram for Star Garage’s Limited revenue and expenditure cycles.
2. Star Garage Limited often buys inventory after receiving a sales order from the customer.
Suppose you are asked to prepare one REA diagram that combines both the sales and collection
process and the purchases and payments process. What would be shared among those
processes? What would be unique to each process? Why?
Step by step
Solved in 3 steps
