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.