On July 23, the companys inventory was destroyed in a hurricane-related flood. For insurance purposes, the company must reliably estimate the amount of inventory on hand on July 23. The company uses a periodic inventory system. The following data have been assembled:

Inventory, January 1	$1,350
Purchases, January 1July 23	$4,000
Sales, January 1July 23	$6,500
Last years gross profit percentage	70%

Estimate the companys inventory as of July 23 using last years gross profit percentage.

	$1,950
	$4,550
	$5,350
	$3,400
	$5,150
	$800