Sole trader final balance sheet upon closing

[Caspar]

I have never had to process a set of accounts where the owner ceases trade. When I have worked it all through, I am currently left with

A personal loan owed to the proprietor of -£4,317 as the closing balance at the top with:

Capital
At previous year -£9,976
Net profit £9,859
Giving a balance of £-117
Drawings £4,200
With £-4,317 closing balance at the bottom.

Is the balance sheet supposed to zero out at the end of trade? As the proprietor has taken on the HP finance going forward, should I bring the £4,317 in as an introduction under Capital, so that top and bottom become zero?

Thanks in advance

 

[MyAccountantOnline]

...

Is the balance sheet supposed to zero out at the end of trade? ...

No, the balance sheet shows assets and liabilities at any given time. Just because the owner has ceased it doesn't for example mean all creditors are paid or all debtors received; this may take several weeks after the date of cessation.

.....As the proprietor has taken on the HP finance going forward, should I bring the £4,317 in as an introduction under Capital, so that top and bottom become zero?

No the debt should be shown as the amount owing at the balance sheet date.

 

[SteveHa]

If this is a sole trader, and unless there are other compelling reasons to do so, I wouldn't even bother with a final balance sheet. It's literally going nowhere.