The special revenue fund purchased $500,000 of material and supplies during the year. At the beginning of the year, there was an inventory of materials and supplies on hand of $100,000. The ending balance of material and supplies was $150,000. The county uses the purchase method to report inventory. How much in expenditures should the special revenue fund report for material and supplies?
1. $450,000.
2. $500,000.
3. $550,000.

4. None of the above.