Business Purchased for $1,000

Client purchased a business (SMLLC/DRE) on 10/31/2023 for $1,000.

The client is continuing with the same accounting / bookkeeping software from 11/1/23 onward.

Agreement reads "Old Owner now wishes to transfer all ownership of Company to New Owner.... for an amount of $1,000 ... said transfer shall include the continuation with any and all contracts in existence with Company as of the date of this resolution..."

The balance sheet on 10/31/23 looked like this:

Negatives (()) are credit balances

Accounts Receivable: $199,128
Accounts Payable: $(50,801)
Retained Earnings: $(101,697)
Net Income: (277,118)

Of the $199,128 AR, $157,000 was paid to the old owner once the business received payment from its customers. The new owner will inherit the remaining $42,128 AR balance.

The new owner will inherit the accounts payable balance of $50,801.

Am I thinking about this right?

10/31 entries:
- Zeroing out all P&L accounts to R/E (call it Old Owner Equity) as of 10/31/23 (updated 10/31 balance of $378,815).
- $157,000 DR Old Owner Equity (R/E) / CR Due to Old Owner (Liability)
- $378,815 DR Old Owner Equity (R/E) / Distributions
- $1,000 to CR New Owner's Equity / DR Cash

It seems corect from my point of view.
Some tips for you to take into consideration are that you need to make sure that the $42,128 Accounts Receivable is a fair value. There might be bad debts or other adjustments needed.
And also , don't forget to verify the $50,801 Accounts Payable balance. Make sure there are no contingent liabilities or other obligations.

Presumably your client paid $1k to the existing owner, not to the LLC, so why are you booking $1k of cash on the LLC's books?

So your client paid $1,000 to end up $8,673 in the hole? That doesn't make sense unless there are some off balance sheet assets that you haven't considered, like intangibles...