Reference no: EM133326642

Case: General Green Productions Ltd has an authorized share of 3,000,000 $1 ordinary shares. On December 31, 2016 the following Trial Balance was extracted from the company's books:   

                                                                              Trial Balance                                                               

Details/Accounts	Dr $	Dr $
Leasehold land and buildings	4,000,000
Provision for depreciation		500,000
Sales		18,000,000
Debtors	3,000,000
Selling expenses	1,500,000
Motor vehicles	6,000,000
Accumulated depreciation		1,000,000
Cash and bank	4,500,000
Purchases	4,300,000
Ordinary shares fully paid up		2,400,000
Other reserves		5,200,000
Inventory , January 1, 2016	1,100,000
Plant and machinery	8,000,000
Provision for depreciation		1,500,000
Wages	950,000
Creditors		2,000,000
Administrative expenses	550,000
Profit and loss account		3,200,000
Interim dividend paid	100,000
Provision for bad & doubtful debts	------------	200,000
Total	34,000,000	34,000,000

Additional information:

1. Provision for bad and doubtful debts is to be adjusted to $300,000.
2. Inventory on December 31, 2016 was $1,300,000.
3. The directors have decided to transfer $2,000,000 to general reserve and have proposed a final dividend of 10%.
4. An amount of $40,000 was pre-paid for insurance on December 31, 2016 while wages owed to an employee for December 2016 amounted to $50,000.
5. Provision is to be made for:
6. Legal fees $60,000.
7. Depreciation to be charged as follows: plant & machinery 10% reducing balance; motor vehicles 20% straight line; and leasehold land and buildings 5% on costs.

Required:

1. Trading and Profit and Loss Account for the period ending December 31, 2015. (not necessarily in a form for publication)
2. Balance Sheet as at December 31, 2016.

         Name the four (4) main principles that are to be considered in the preparation of financial