Exercise 6-12 Estimating ending inventory-gross profit method LO6 On January 1, The Parts Store had a $380,000 inventory at cost. During the first quarter of the year, it purchased $1,520,000 of merchandise, returned $19,600, and paid freight charges on purchased merchandise totalling $34,100. During the past several years, the store's gross profit on sales has averaged 20%. Under the assumption the store had $1,930,000 of sales during the first quarter of the year, use the gross profit method to estimate its inventory at the end of the first quarter