Kanjombe limited operates a courier service, delivering parcels and important
documents in big cities in Namibia. The company owns a fleet of motorbikes,
accounted for as Property, plant and equipment.
The fleet of motorbikes was purchased on 1 January 2012 at a cost of N$2 000 000,
on which date the total useful life was estimated to be 20 years. The residual value
was estimated to be nil and depreciation is provided on a straight line basis
During the year to 31 December 2015, the total estimated useful life of the
motorbikes was re-estimated to be 13 years calculated as from 1 January 2015.
The estimated residual value remained unchanged.
The company uses the re-allocation method to account for changes in estimates
Kanjombe limited does not own any other items of property, plant and equipment
The depreciation expense for the year has been processed based on the old
estimate. You are given the following statement of comprehensive income for the
year ended 31 December ,2015, drafted before adjusting for the effects of the
change in estimates

KANJOMBE LIMITED

DRAFT STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED

Required:
(a) Prepare the journal entries to account for the change in estimate in the
accounting entries of Kanjombe limited for the year ended 31 December 2015
(4 marks)
(b) Prepare the notes to the financial statements of Kanjombe limited for the year
ended 31 December 2015 in accordance with international financial reporting
standards( accounting policies are required) (13 marks)
( c) Prepare the statement of comprehensive income of Kanjombe limited for the
year ended 31 December in accordance with International Financial Reporting
Standards ( Notes are not required) (6 marks)
(d) Disclose , property, plant and equipment in the statement of financial position of
Kanjombe limited as at 31 December 2015 in accordance with International
Financial Reporting Standards( Notes are not required)