Treatment of fixed assets (laptop)

CA Sunil (Auditing and Assurance Service)   (169 Points)

11 April 2015  

Company purchases a Laptop and then gives it to employees.

Company recover full amount from the employees salary on monthly basis towards laptop.

At the same time CO is claiming depreciation in its books. Company is showing this recovery as advance received from employees.

My Query is:

1. Can Company carry this laptops a FA in its books?

2. Is treatment of Advance correct, How is it to be treated?

3. How does this treatment of advance distort the balance sheet?

4. Whats the ideal treatment for above transaction ?