Knowledge Check 01 Octavia Corporation uses perpetual FIFO throughout the year to maintain internal records but at the end of the year adjusts these amounts to LIFO for financial reporting purposes. The company began the year with a credit balance of $50,000 in its LIFO reserve account. By the end of the year, the difference between LIFO and FIFO inventory balances increased to $60,000. Prepare the appropriate adjusting journal entry dated as of the end of the year.