The City of Marshall uses the purchases method for recording its inventory of supplies in the General Fund. Rather than using a perpetual inventory system, inventories are updated at year-end based on a physical count. Physical inventories were $85,000 and $75,000 at December 31, 2010 and 2011, respectively. The adjusting journal entry on December 31, 2011, will include a:
a. Debit to Inventory of Supplies for $75,000.
b. Debit to Expenditures for $10,000.
c. Credit to Inventory of Supplies for $10,000.
d. Credit to Expenditures for $10,000.