On February 26 a hurricane destroyed the entire inventory stored in a warehouse owned by the Rockford Corporation. The following information is available from the records of the company's periodic inventory system: beginning inventory, $260,000; purchases and net sales from the beginning of the year through February 26, $480,000 and $680,000, respectively; gross profit ratio, 20%.

Estimate the cost of the inventory destroyed by the hurricane using the gross profit method.