Concept and purpose
The production structure of any industrial enterprise is based on the interconnection of its divisions. This includes affiliates and subsidiaries, representative offices and branches, as well as individual product manufacturing lines. Among them are large industrial units (factories), as well as its constituent parts - departments (shops), sections, teams. The production structure may include a service facility. Its divisions do not participate in the creation of products for sale, but provide for the needs of main and auxiliary production.
The main task of the service economy is to ensure the continuous and optimal functioning of auxiliary and main production, by meeting various industrial needs. If necessary, its workshops can take on part of the orders. This sometimes happens when equipment breaks down or when there is a need to make increased deliveries of products.
Concept and types of service farms
Account 29 reflects and analyzes information on the amounts of expenses incurred by divisions that serve the needs of main and auxiliary production, as well as provide services and work to third parties. Farms that provide such work usually include:
- children's institutions (health camps and kindergartens for children of employees);
- cultural and recreational institutions (cultural centers, recreation centers, boarding houses);
- public service establishments (laundries, sewing workshops);
- catering establishments (cafes, canteens, buffets).
Often, large manufacturing enterprises provide their employees with an apartment (room) in a dormitory, thereby providing not only housing, but also utility services. Expenses for the provision of housing and housing and communal services are also included in the costs of service enterprises.
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Composition of service production
This industrial division plays an important role in the production processes of products in the main activity of the enterprise. Service production is able to provide semi-finished products, materials and various services to all other departments. Typically this unit consists of:
- Transport workshop - provides services for the transportation of goods, equipment, materials and other material assets necessary for production. It is important that transportation is carried out only within the enterprise. According to its structure, it can be divided into sections (operational, dispatch, repair, etc.).
- Sales and supply services - provides the necessary materials and equipment, carries out work on the disposal of materials and other valuables that are not suitable for use. Carries out the sale of unclaimed inventories.
- Warehousing - stores and collects materials and equipment that may later be useful to the main or auxiliary production.
- Household premises and catering departments.
In addition, many large industrial enterprises have their own social and cultural complex, consisting of children's institutions (camps, kindergartens), cultural centers or recreation centers, and dormitories for employees. The costs of maintaining such premises, including utilities, are also reflected as part of the costs of service production.
What the legislation says about employee nutrition
The employer is obliged to provide employees with special food if they work in harmful or especially harmful conditions (Article 222 of the Labor Code of the Russian Federation). In the first case, this is milk or food products equivalent to it, in the second case, therapeutic and preventive nutrition.
Special food for ordinary “pests” can be replaced with a compensation payment, the amount of which is similar to the cost of milk or equivalent food products.
On its own initiative, the employer can organize meals for employees free of charge or with partial reimbursement of expenses: open a canteen, organize the delivery of food from catering organizations, purchase products for cooking, and compensate employees for food expenses.
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An employer can take into account voluntary expenses for staff meals if the following conditions are met:
- Costs are included in the list of payments related to the wage system in accordance with Art. 129 Labor Code of the Russian Federation. To do this, payments related to the wage system must be included in the company’s local documentation, for example, in a collective agreement, wage regulations or employment contract with the employee.
- Payment for food refers to payment in kind (non-monetary) nature, and therefore, according to Art. 131 of the Labor Code of the Russian Federation, its value should be no more than 20% of the entire salary accrued for the month. The employee must write a request to provide him with part of the salary in kind.
Account 29
A large amount of information about the activities of the service business requires the allocation of a separate account for collecting data and recording it in accounting. Section III of the Standard Chart of Accounts contains account 29, which serves for such purposes. It has an active structure, since it is reflected in the assets of the balance sheet. In the process of carrying out business transactions, entries occur, which in debit mean an increase in direct expenses for the activities of service production, and in credit - their write-off and distribution among items.
This account, like other Section III accounts, accumulates expenses over a period. At the end of the month, amounts are written off to the debit of other accounts. Thus, there is no balance at the end of the period. Account 29 has a distinctive feature - it takes into account only direct expenses that are associated with the direct functioning of service farms and departments.
Analytical accounting
Service production may consist of many divisions. The activities of each of them must be documented. For these purposes, subaccounts 29 are opened, which are intended to collect information in a specific area and for similar purposes. An enterprise can keep records regarding service facilities on the following analytical accounts:
- 29/1 “Housing and communal services” - to account for the costs of maintaining housing facilities (dormitories, utilities) on the balance sheet of the enterprise;
- 29/2 “Agricultural subsidiary farms” – collection of costs aimed at fattening poultry or livestock, growing crops;
- 29/3 “Household services” - to account for the costs of maintaining household organizations and its personnel (baths, hairdressers, laundries, etc.);
- 29/4 “Children’s preschool institutions” – collection of information on the costs of preschool institutions;
- 29/5 “Maintenance of sanatoriums and other health institutions”;
- 29/6 “Cultural institutions” - to account for the costs of maintaining cultural palaces owned by the enterprise and the costs of holding entertainment events;
- 29/7 “Catering divisions” – maintenance of canteens and buffets on the balance sheet of the enterprise.
Analytical accounting of production costs, implementation of work (provision of services) by service units should be organized separately for each type of activity.
Debit account 29
The reader already knows that account 29 is active. This means that any receipt of funds will be reflected in debit. In this case, revenue is considered to be the creation of new expenses for service production. Here we indicate the direct costs that arose in connection with the performance of work or the manufacture of products for our own needs. The amounts of materials used and other valuables are written off from the credit of their accounting accounts to debit 29. Expenses of auxiliary production, if they arise, are also written off by posting Dt 29 Kt 23.
It is worth knowing that general business expenses arising from the manufacture of products or the provision of services (performance of work) are not taken into account as part of the direct costs of service production if they were intended for their own needs (with the exception of construction and major repairs). If the result of the activity was transferred to a third party, then part of the general business expenses is written off as direct costs of service production: Dt 29 Kt 26.
Accounts used in conjunction with account 29
The following accounts correspond to account 29:
| By debit | By loan |
| 02 | 10 |
| 04 | 11 |
| 05 | 25 |
| 10 | 26 |
| 11 | 29 |
| 16 | 40 |
| 19 | 43 |
| 23 | 44 |
| 25 | 45 |
| 26 | 73 |
| 28 | 76 |
| 29 | 79 |
| 60 | 80 |
| 68 | 90 |
| 69 | 91 |
| 70 | 94 |
| 71 | 96 |
| 76 | 97 |
| 79 | 99 |
| 90 | |
| 91 | |
| 94 | |
| 96 | |
| 97 |
Cost monitoring
The expenditure of funds arising from the activities of service services is distributed among each separate division, type of product manufactured or service provided (nomenclature groups), as well as separate cost items.
Account credit 29
The costs of producing products or performing work in service production must be taken into account in the financial result of the enterprise. They are written off on the credit of account 29. In addition, this part also takes into account the amounts of the actual cost of products manufactured or services provided.
Account 29 “Service production and facilities” interacts with the accounts of inventory items or department costs. If the results of activities are aimed at selling to a third party, then the amounts are written off to the debit of account 90.
Which accounts does account 70 correspond to?
Account 70 corresponds with many expense accounts. For convenience, we have collected everything in a table.
| Account 70 corresponds by debit with | Account 70 corresponds for the loan with |
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Typical transactions on account 29
Having understood the principle of interaction of account 29 with other accounting accounts in the process of carrying out business transactions, you can begin to consider typical transactions.
Account assignments for account 29
| Dt | CT | Characteristics of a business transaction |
| 29 | 71 | Expenses of servicing production are written off to an accountable person |
| 29 | 28 | The cost of production includes losses from defects produced by the service facility |
| 45 | 29 | Products manufactured by service production were shipped to a third party |
| 90.2 | 29 | The cost of sales of products manufactured by service production was written off |
| 80 | 29 | The work in progress of the service business was transferred in full to the member of the partnership |
| 97 | 29 | Maintenance production costs are included in deferred expenses |
| 29 | 11 | The cost of young animals used for the needs of the service farm has been written off |
Accounting: write-off of costs
After the services (work) of service industries and farms are provided (performed), their cost (i.e., expenses recorded in the debit of account 29) is written off from account 29 to the accounts of service consumers. Calculate the cost of services (work) based on the actual costs of their provision (performance), which are collected in the debit of account 29 (Instructions for the chart of accounts). In this case, use the method of cost accounting and cost calculation that is enshrined in the accounting policy for accounting purposes.
If the consumer of services (work) were employees of the organization, make the following entries:
Debit 23 (25, 26, 29, 44, 70, 73, 91-2...) Credit 29 – the cost of services provided (work performed) of service industries and farms is taken into account as part of production costs, settlements with personnel, other expenses, etc. d.
Do this, for example, if the organization provides free meals to employees.
This procedure follows from the Instructions for the chart of accounts.
If service industries and farms produce products that are consumed by the organization’s employees, first capitalize them, and then write off the cost of the products as the costs of the corresponding structural unit. If an organization accounts for finished products at actual cost, make the following entries:
Debit 43 Credit 29 – products of service industries and farms were capitalized;
Debit 23 (25, 26, 29, 44... ) Credit 43 – the cost of products produced by service production and households is taken into account as part of the expenses of the corresponding structural divisions.
If an organization accounts for finished products at standard cost, make the following entries:
Debit 43 (43 subaccount “Finished products at standard cost”) Credit 40 (29) – products of service industries and farms were capitalized at standard cost;
Debit 23 (25, 26, 29, 44... ) Credit 43 (43 subaccount “Finished products at standard cost”) - the standard cost of products produced by service production and economics is taken into account as part of the expenses of the corresponding structural divisions.
For more information on how to keep records of finished products at standard costs, see How to keep records of costs for the production of products (works, services) in a standard way.
This procedure follows from the Instructions for the chart of accounts (accounts 29, 40, 43).
If service industries and farms sell products, provide services (perform work) to other organizations and citizens, at the time of their sale (provision) make the following entries:
Debit 62 Credit 90-1 (91-1) – income from the sale of products, services (works) of service industries and farms is reflected;
Debit 90-2 (91-2) Credit 29 (43) – the cost of products, services (works) of service industries and farms that reduce income from their sale is taken into account;
Debit 90-3 (91-2) Credit 68 subaccount “Calculations for VAT” - VAT is charged on the cost of services (work) sold (if this operation is subject to VAT).
For more information on how to take into account income and expenses when selling services (work), see How to record the sale of work (services) in accounting.
This procedure follows from the Instructions for the chart of accounts.
If service industries and farms simultaneously provided services (performed work) to several divisions of the organization, their cost must be distributed. This is necessary to know what cost of services from service industries and farms will increase the costs of the corresponding division of the organization. That is, what amount will be debited to accounts 20, 25, 26, 29, etc. Develop the procedure for distributing expenses yourself. For example, expenses can be distributed in proportion to the salaries of employees working in the relevant divisions of the organization, served by service industries and farms. Fix the selected option in the accounting policy for accounting purposes (clause 7 of PBU 1/2008).
The balance at the end of the month on account 29 will show the value of work in progress (Instructions for the chart of accounts). This situation may arise when work or services are not completed at the end of the month (clause 64 of the Regulations on Accounting and Reporting).
An example of making entries for account 29
Let's consider a situation in which an enterprise runs a children's health camp. Gradually, cost items will be formed that will need to be reflected in accounting data. For example: as a result of the first shift of children’s holidays, the following expenses arose:
- depreciation of fixed assets in the amount of 3200 rubles;
- use of utilities – 21,000 rub. (VAT RUB 3,784);
- staff salary – 100,000 rubles;
- mandatory contributions – 22,000 rub.
Account 29 will be replenished with the following entries:
- Dt 29 Kt 02 for 3200 rub. – reflects the amount of depreciation of the camp property;
- Dt 29 Kt 60 for 17,216 rub. – utility costs are taken into account (excluding VAT);
- Dt 19 Kt 60 for 3784 rub. – accepted for accounting for VAT on utility bills;
- Dt 29 Kt 70 per 100,000 rub. – wages for camp staff were accrued;
- Dt 29 Kt 69 for 22,000 rub. – the amount of contributions to extra-budgetary funds was posted.
Accounting for production costs (in this case, for the provision of educational and health services) was reflected in the debit of account 29. The final result will be written off to account 91.
Maintenance of our own production facilities
What will the postings look like if the service production carries out work in order to provide the main or auxiliary production with the necessary materials or other means? Reflecting transactions of this type is quite simple. To begin with, you should debit account 29 the costs associated with the process of manufacturing products in the service production (cost of materials, wages, electricity consumed, etc.). After completion of the process, all accumulated costs in connection with the completion of this task are written off as a debit to the main or auxiliary production account.
29 accounting account serves to reflect information about the activities of service production or farming, which sometimes forms a large complex of divisions of various directions. After accumulation in the debit of the account, expenses are subject to write-off depending on the nature of their occurrence. The account is closed, and everything starts all over again in the new month.
Account 29 in accounting: service industries and farms
The use of account 29 is applicable to those enterprises in the production sector that have farms on their balance sheet whose task is to serve the needs of basic production. Today's article is devoted to such issues as the concept and types of service enterprises, correspondence of 29 items with other accounts and standard accounting records. Along with this, we will look at how this position works in practice.
In order for the auxiliary and main production processes to operate continuously and optimally, service farms are created. If such a need arises, then these service structural units are able to take on the load of fulfilling part of the orders. A similar situation is possible if the equipment in the main workshops turns out to be faulty or it is necessary to supply a large batch of goods.
In general, service farms make it possible to provide production workshops with materials, semi-finished products and a certain range of services. Service production typically includes:
- a transport workshop that transports cargo, materials, equipment and other materials necessary to service the manufacturing process;
- supply and sales service, whose task is to provide the required equipment and materials, recycling materials unsuitable for use. Along with this, this service sells unclaimed material and production reserves;
- warehousing, which collects and stores materials and equipment that in the future can be used in the main or auxiliary production processes;
- household premises and catering departments.
