Enter your ending inventory as $0 in TurboTax, this will write off the remaining inventory. Then you can report the $700 salvage as "Other income". It goes on Line 6 of Part 1 Schedule C, between Gross Profit (Line 5) and Gross Income (Line 7).
This is the easiest way to do it. As long as the $700 income is on there, the IRS doesn't care where you put it. The end result is the same.
