Exercise 17.4 (Static) Estimating inventory cost under the gross profit method. LO 17-4 Average gross profit rate: 30% of sales Inventory on January 1 (at cost): $230,000 Purchases from January 1 to date of inventory estimate: $1,040,000 Net sales for period: $1,300,000 Use the above data to compute the estimated inventory cost for Peterson Company under the gross profit method. Beginning inventory, January 1 Purchases Cost of goods available for sale Estimated ending inventory 13