On July 23, the company’s inventory was destroyed in a hurricane-related flood. For insurance purp

On July 23, the company’s 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 1 – July 23 $4,000 Sales, January 1 – July 23 $6,500 Last year’s gross profit percentage 70% Estimate the company’s inventory as of July 23 using last year’s gross profit percentage. $5,150 $4,550 $1,950 $800 $3,400 $5,350