1.2 FS-17YashPankhania

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School
Humber College **We aren't endorsed by this school
Course
SCM 5502
Subject
Accounting
Date
Oct 14, 2023
Pages
4
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SCM5502 Assignment 1.2 Case 1: ABC Corp. (Q1-Q2) 1. A) Accounts receivable balance at start of business day, ABC Corp. $7,380 New Sales order = 1,728 bars Price = $1.85/bar Sale order price = 1,728*1.85 = $ 3,196.8 Total Commitment = 7,380 + 3,196.8 = $ 10,576.8 Credit Limit = $12,000 B) Yes, Since the Total Commitment is under the credit limit, credit will be granted, and sales order will be processed for delivery. 2. A) New Sales order for customer, New Sales order = 864 bars Price = $1.75/bar Sale order price = 864*1.75 = $ 1512 Total Commitment = 10,576.8 + 1512 = $ 12,088.8
B) Credit won't be given. By looking at open orders, open deliveries, and receivables, static checks are conducted. There are two ways to look at a non-integrated system: with data sharing and without data sharing. When two systems share data for processing, in my opinion, the primary system would retrieve the data from the secondary system before determining the processing credit limit, i.e., a larger commitment would result in a processing credit limit that would prevent further processing. The only problem will be when checking real-time data; if both departments update at the same time, conflicts may result. When two systems are not connected and operate independently, which means that logistical activities are carried out in isolation within the system without regard for the accounting component, credit will be provided since the values fall within the credit limit. Case 2: XYZ Corp. (Q3-Q4) 3. a) Accounts receivable balance at start of business day, ABC Corp. $9,500 New Sales order = 1,440 bars Price = $1.85/bar Sale order price = 1,440*1.85 = $ 2,664 Total Commitment = 9,500+ 2,664 = $ 12,164 Credit Limit = $14,500
B) Yes, Total Commitment fall under credit limit. 4. a) New Sales order = 864 bars Price = $1.85/bar Sale order price = 864 *1.85 = $ 1,598.4 New Total Commitment = 12,164 + 1,598.4 = $ 13,762.4 Credit Limit = $14,500 B) Yes, Credit limit is more than total commitment. C) Yes, Since the commitment still fall under the credit limit system will process the data. Case 3: POPPER Corp. (Q5-Q6)
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