XYZ Inc. uses the FIFO method for inventory valuation. Given the following data for the year ended December 31, 2023:

• Beginning Inventory: 500 units at $8 per unit
• Purchases:
  • March 1: 1,000 units at $10 per unit
  • July 1: 800 units at $12 per unit

• Sales:
  • 1,500 units sold during the year

• Ending Inventory: 800 units

a. Calculate the cost of goods sold (COGS) using the FIFO method. b. Determine the value of ending inventory using the FIFO method. c. Prepare XYZ Inc.'s income statement showing gross profit using FIFO. d. Explain how the use of FIFO affects the balance sheet compared to using LIFO.