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 Balance sheet data Assets 20X7 20X6 Cash $2,900$1,000 Accounts receivable 2,500 2,000 Inventory 7,400 8,000 Property, plant, equipment 9,200 9,000 Accumulated depreciation (2,900) (2,500) Total assets $19,100$17,500 Liabilities and Equity Accounts payable $4,700$4,500 Interest payable 1,500 1,000 Dividends payable 1,000 2,500 Long-term debt 4,350 3,700 Bank note 1,000 800 Common stock 3,300 3,000 Retained earnings 3,250 2,000 Total liabilities and equity $19,100$17,500

 Income statement for the year 20X7 Sales $28,500 COGS 19,900 Depreciation 3,700 Interest expense 1,244 Gain on sale of old machine 1,150 Taxes 1,142 Net income$3,664

Notes:

• Dividends declared to shareholders were $850. • New common shares were sold at par for$1020.
• Fixed assets were sold for $3500. Original cost of these assets was$2000, and $350 of accumulated depreciation has been charged to their original cost. • The firm borrowed$200 in a 10-year bank note – the proceeds of the loan were used to pay for new fixed assets.
• Depreciation for the year was $3700 (accumulated depreciation up$2900 and depreciation on sold assets $800). • The company uses the LIFO inventory cost flow method. Had FIFO been used, inventories would have been$1,000 higher in 20X6 and $900 higher in 20X5. • The effective tax rate for 20X6 was 30%. For all other years, the effective tax rate was 20%. • At the beginning of 20X8, A firm issues a$10,000 bond with a 6% coupon rate, 4-year maturity, and annual interest payments when market interest rates are 7%.
1. Assuming IFRS, calculate cash flow from operations with the direct method. Please explain your answer by showing each step of calculation.