On January 1, The Parts Store had a $500,000 inventory at cost. During the first quarter of the year, it purchased $1,640,000 of merchandise, returned $25,600, and paid freight charges on purchased merchandise totalling $40,100. During the past several years, the store's gross profit on sales has averaged 20%. Under the assumption the store had $2,050,000 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. Ending inventory