At the beginning of 2012, the City of Fairview reported an Unreserved Fund Balance of $555,000 and a supplies inventory balance of $175,000. During the year, Fairview purchased $225,000 in supplies and used $220,000 worth. The city will report a reserve for supplies inventory.

Required:
A. Prepare the necessary journal entries under the purchases method.
B. Prepare the journal entries needed to account for the supplies under the consumption method.
C. What would the 12/31/12 balance in the Unreserved Fund Balance be under each method, assuming that the only transactions of the fund are those involving the supplies?