E5-31A. (Learning Objective 5: Analyzing a company’s financial statements) Modern Limited, the electronics and appliance chain, reported these figures in millions of dollars:

Requirements 1. Compute Modern’s average collection period during 20X7.
2. Is Modern’s collection period long or short? Viflex Networks takes 25 days to collect its average level of receivables. Domarko, the overnight shipper, takes 35 days. What causes Modern’s collection period to be so different?

Transcribed Image Text:

20X7 Net sales.... $578,000 20X6 $607,000 Receivables at end of year. 3,750 4,920