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Post Info TOPIC: How do I account for this?
Samilou67


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How do I account for this?
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Hi I have a client who has an online shop selling tools for making jewellery, they have been trading as sole traders for about 3 years. They have bought out a company using money from the original and I am confused as how I show this purchase in the accounts. They have merged the two companies so only one set of accounts.

Thanks



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Sam
abacus12345


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Hi. Are these sole traders or companies? Top half of your post seems to relate to ST, lower to companies.

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Samilou67


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Sorry sole trader



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Sam
abacus12345


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Aside from buying tangible assets, is there anything else which has been bought? Customers details etc?

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Johnny  - Owner of an overly-active keyboard. 

A man who can read, yet doesn't, is in no way wiser than a man who can't.

 
Samilou67


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Just emailed them to find out

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Sam
Cheshire


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I was wondering the same about the status. Are they both sole traders? Had a full share purchase going on in my head.

Has an Accountant been advising on this?


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 Joanne 

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Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Cheshire


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I would be wanting to see the agreement. Might be worth just keying your Bank entry for the payment to an 'unallocated' or 'purchased business - to be sorted' styled account and then leaving it for the Accountant at the year end, especially if you have no experience of such purchases.

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Samilou67


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It's ok, part of it was for their website and the rest was stock

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Sam
Samilou67


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Thanks Jo, I will take your advice

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Sam
Cheshire


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So they have purchased the company/sole traders (?) business name?

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
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