Nike, Inc. uses the FIFO method for inventory valuation. The following information is available for the year ending December 31, 2023:

• Beginning inventory: 3,000 units @ $20 each
• Purchases: 7,500 units @ $22 each
• Sales: 8,000 units @ $40 each

Required:

1. Calculate the cost of goods sold (COGS).
2. Determine the ending inventory value.
3. Prepare the journal entries for inventory purchases and sales.
4. Discuss the impact of the FIFO method on financial statements during periods of rising prices.