Sole trader cessation
System
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Client's bank account closed 25/4/06 still owes 4000 to creditors. Formed Ltd 1/3/06. My question is about the balance sheet. Should it show the position as at 28/2/06 when he stopped trading and started to work through the LTD, if so what happens to all the entries that follow to clear the creditors/debtors/assets?
Also, if anybody could recommend a book/reference material on the accounting treatment for cessation of an entity it would be greatly appreciated
Also, if anybody could recommend a book/reference material on the accounting treatment for cessation of an entity it would be greatly appreciated
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Re:Sole trader cessation
If I remember correctly, everything should go through a revaluation account with the balance showing as a loan to the company. The reverse is shown in the company accounts with the balance shown as a loan to the company. All Fixed assets should be passed to the new company at Tax Written Down Values to avoid tax complications.
Ben0