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Accounting Tutorial › With Two General 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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