A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that date indicated the following:

Merchandise inventory, January 1, 2021 .............$1,900,000
Purchases to date ....................................................5,800,000
Freight-in .....................................................................400,000
Sales to date .............................................................8,200,000

The gross profit ratio has averaged 20% of sales for the past four years.

Required:
Use the gross profit method to estimate the cost of the inventory destroyed in the fire.