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Accounting Tutorial › With Restricted Funds

Here we will adjust SpringTime’s ending inventory and record the cost of sales for Flower Pins.

We are told that the ending value of flower pins is $200. We see that the opening balance was $300. As we are not aware of any additions of inventory, we can presume that $100 of inventory was sold in the year. We see that flower pin revenue has a healthy mark-up and therefore no writedown is required for inventory.

We therefore make the following adjustment to inventory and record the cost of sales:

  dr cr
Flower Pin cost of sales 100  
Flower Pin inventory   100

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