On January 1, JKR Shop had $490,000 of inventory at cost. In the first quarter of the year, it purchased $1,630,000 of merchandise, returned $23,500, and paid freight charges of $38,000 on purchased merchandise, terms FOB shipping point. The companys gross profit averages 30%, and the store had $2,040,000 of net sales (at retail) in the first quarter of the year. Use the gross profit method to estimate its cost of inventory at the end of the first quarter.