AutoParts Ltd. uses a periodic inventory system and the LIFO method for inventory valuation. The company recorded the following inventory transactions in December 20X1: Beginning Inventory on December 1 was 200 units at $45 per unit. On December 10, AutoParts purchased 500 units at $50 per unit. On December 20, they purchased an additional 400 units at $55 per unit. By December 31, the ending inventory was 350 units. Sales for the month totaled 750 units.

Required:

1. Calculate the cost of goods sold (COGS) and ending inventory using the LIFO method.
2. Prepare the journal entries to record the purchases and sales during December.
3. Discuss the impact of using LIFO on the company’s gross profit and tax liability compared to FIFO.
4. Explain how the periodic inventory system affects the timing of expense recognition in financial statements.