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

$4,000Sales, January 1July 23

$6,500Last years gross profit percentage70%

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