Accounting Information Systems: LBR Case - Purchase Process Activity

DATA MODEL (REA) EXERCISE Laguna Beach RENTALS (Purchase/Acquisition Cycle)

Laguna Beach Rentals(LBR) rents vacation homes on or near the ocean in Laguna Beach and the surrounding area to vacationers from all over the world. This case describes part of theacquisitions cycle(how they contract with homeowners for the vacation houses that they ultimately rent to vacationers).

LBR deals primarily with waterfront and water view homes in Southern Orange County and Laguna Beach, in particular. LBR offers its inventory of homes as short-term rentals to vacationers from around the world. First, however, LBR needs to negotiate contracts with the homeowners. LBR employees, who are called LBR-agents, contract with the homeowners to acquire LBR's house inventory. Those owners interested in offering their houses as short-term vacation rentals contact LBR. LBR-agentsformer marketing majors that are renowned for their fast-talking and flamboyant lifestylesnegotiate the terms of the contract with the house owners. After negotiating the terms, the LBR-agent signs the contract with the house owner. Contracts for individual properties, which are identified by their uniquestreet address in LBR's system, last 12 to 36 months, butsometimes, LBR-agents negotiate new contracts with the owners at the end of that period (so there would be multiple contracts for one house over time). Some house owners offer several houses to LBR. Contracts automatically expire if the owner sells the house, but LBR then attempts to negotiate a contract with the new owner.

LBR tracks its houses by neighborhood. LBR assigns one specific LBR-agent to each neighborhood to negotiate contracts for all houses in that neighborhood, but each LBR-agent may be assigned to multiple neighborhoods.

LBR enters information on each house into the database after the contract is signed; however, they enter information on neighborhoods into the database as soon as they decide to acquire houses in that neighborhood in the future.

Normally, LBR contracts specify that payments to the owners depend on the amounts that LBR is able to rent the properties for. The owners usually receive 85% of the rental amounts (but that percentage is negotiable) and LBR keeps the rest. LBR-cashiers process the payments to the owners. When multiple payments are due to the same owner during the same month (because LBR has contracted for more than one property from that person), cashiers simply disburse one check for the combined payment.

LBR-cashiers are much more restrained than the flamboyant LBR-agents who revel in their ability to wheel and deal in high value real estate. LBR-cashiers are bonded for security purposes, and cashiers never become agents (or vice-versa), so LBR tracks LBR-cashiers separately from LBR-agents.

All payments to the house owners are made by checks drawn from company bank accounts. The check numbers are unique.

REQUIRED: 1) use the information below and the list of attributes at the end (no additions) to draw one REA diagram for each part showing the classes, associations, and multiplicities 2) do a data dictionary for each part listing the tables necessary to supportLaguna Beach Rentalsrental processes using all the attributes (name each table, underline the primary key, and place an asterisk by each foreign key).

Attributes agent employee# agent name agent real estate license status bank account # bank account balance cashier bonding status cashier employee# cashier name check # check date disbursement $ amount Pool (Y/N) house street address house zip code contract # contract date contract duration contract percentage to owner neighborhood name number of bedrooms owner ID# number of houses contracted in this neighborhood owner name