Exercise 5-17B Estimating ending inventory-gross profit method LO P4 On January 1, JKR Shop had $520,000 of beginning inventory at cost. In the first quarter of the year, it purchased $1.660,000 of merchandise, returned $23,800, and paid freight charges of $38,300 on purchased merchandise, terms FOB shipping point. The company's gross profit averages 25%, and the store had $2,070,000 of net sales (at retail) in the first quarter of the year. Use the gross profit method to estimate its cost of inventory at the end of the first quarter. $ 520,000 Beginning inventory Net cost of goods purchased Estimated March 31 Inventory