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

• Beginning inventory: 200 units @ $50 each
• Purchases:
  • 400 units @ $52 each
  • 300 units @ $55 each

• Sales: 700 units @ $100 each (200 units from beginning inventory, 400 units from first purchase, 100 units from second purchase)

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 specific identification method on financial statements.