When analysing the cash flow statement of SHAPE Ltd for the year ended 30 September 2018, it is evident that the largest portion of the negative cash flow can be attributed to:

• A. The issue of ordinary shares
• B. The net loss
• C. Investment activities
• D. Operating activities
• E. Financing activities

PART 3 - QUESTION The following information has been extracted from the records of SHAPE Ltd that sells sports equipment across South Africa. The following information has been extracted for the year ended 30 September 2018. SHAPE Ltd Extract from the statement of profit or loss and other comprehensive income for the year ended 30 September 2018 R Gross profit 2 400 000 (1 580 000) Other operating expenses Operating profit 820 000 Other operating income Profit on sale of equipment 12 000 Profit from operations 832 000 Financing activities Investment income - dividends 68 000 Interest on mortgage bond (164 000) Profit before tax 736 000 Income tax (187 040) Profit for the year 548 960 SHAPE Ltd Cash flow statement for the year ended 30 September 2018 R 115 960 Cash flow from operating activities Cash received from customers 5 850 000 (5 010 000) Cash paid to suppliers and employees Net cash generated by operations 840 000 Dividends received 68 000 Interest received Dividends paid (410 000) Interest paid (164 000) Tax paid (218 040) Cash flow from investment activities (1 644 400) Increase in investments (314 400) Purchase of land for expansion Proceeds from sale of machinery (1 200 000) 30 000 (160 000) New equipment for expansion Cash flow from financing activities 1 000 000 550 000 Increase in mortgage bond Issue of ordinary shares 450 000 (528 440) Net increase (decrease) in cash and cash equivalents Cash & cash equivalents at beginning of period 29 000 Cash & cash equivalents at end of period (499 440) REQUIRED: Answer the multiple-choice questions on eFundi applicable to PART 3 of your POE