Inventory Accounting General City's general fund reported a supplies inventory costing $100,000 at the beginning of the fiscal year. During the year, General City purchased materials and supplies for $8,000,000; $200,000 remains unpaid at year-end. Materials and supplies costing $140,000 are on hand at the end of the fiscal year. Required Prepare the summary journal entries made this year using the consumption and purchases methods. For the purchases method, inventory levels are considered insignificant. Consumption mehod Expenditures Inventory Cash Description Accounts payable To record supplies used. Debit 7,960,000 Credit 100,000 x 0 8,000,000 x 0 8,000,000 x Fund balance - unassigned Fund balance nonspendable To adjust fund balance for supplies on-hand. Purchases method 7,800,000 * 0 7,800,000 x Description Debit Credit Expenditures 40,000 x Cash 0 40,000 x Accounts payable To record supplies used. 0 5 x