Question

In: Accounting

Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 13,000...

Cherokee Inc. is a merchandiser that provided the following information:

Amount
Number of units sold 13,000
Selling price per unit $ 16
Variable selling expense per unit $ 1
Variable administrative expense per unit $ 1
Total fixed selling expense $ 18,000
Total fixed administrative expense $ 13,000
Beginning merchandise inventory $ 9,000
Ending merchandise inventory $ 25,000
Merchandise purchases $ 88,000

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.

Solutions

Expert Solution

1.

Traditional income statement

Sales $208,000
Cost of goods sold $72,000
Gross Margin $136,000
Selling and administrative expense:
Selling expense $31,000
Administrative expense $26,000
Net operating income $79,000

2.

Contribution format income statement

Sales $208,000
Variable expense:
Cost of goods sold $72,000
Variable selling expense $13,000
Variable administrative expense $13,000
Contribution margin $110,000
Fixed expense:
Total fixed selling expense $18,000
Total fixed administrative expense $13,000
Net income $79,000

Related Solutions

Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 13,000...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 13,000 Selling price per unit $ 15 Variable selling expense per unit $ 1 Variable administrative expense per unit $ 1 Total fixed selling expense $ 18,000 Total fixed administrative expense $ 16,000 Beginning merchandise inventory $ 9,000 Ending merchandise inventory $ 22,000 Merchandise purchases $ 85,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 11,000...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 11,000 Selling price per unit $ 17 Variable selling expense per unit $ 1 Variable administrative expense per unit $ 3 Total fixed selling expense $ 21,000 Total fixed administrative expense $ 15,000 Beginning merchandise inventory $ 9,000 Ending merchandise inventory $ 26,000 Merchandise purchases $ 89,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 11,000...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 11,000 Selling price per unit $ 17 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 2 Total fixed selling expense $ 19,000 Total fixed administrative expense $ 13,000 Beginning merchandise inventory $ 10,000 Ending merchandise inventory $ 26,000 Merchandise purchases $ 90,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Cherokee, Inc. Traditional Income...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 20,000...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 20,000 Selling price per unit $ 30 Variable selling expense per unit $ 4 Variable administrative expense per unit $ 2 Total fixed selling expense $ 40,000 Total fixed administrative expense $ 30,000 Beginning merchandise inventory $ 24,000 Ending merchandise inventory $ 44,000 Merchandise purchases $ 180,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 14,000...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 14,000 Selling price per unit $ 17 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 2 Total fixed selling expense $ 21,000 Total fixed administrative expense $ 14,000 Beginning merchandise inventory $ 8,000 Ending merchandise inventory $ 23,000 Merchandise purchases $ 87,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Cherokee, Inc. Traditional Income...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 14,000...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 14,000 Selling price per unit $ 16 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 2 Total fixed selling expense $ 21,000 Total fixed administrative expense $ 16,000 Beginning merchandise inventory $ 10,000 Ending merchandise inventory $ 25,000 Merchandise purchases $ 88,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 12,000...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 12,000 Selling price per unit $ 15 Variable selling expense per unit $ 1 Variable administrative expense per unit $ 2 Total fixed selling expense $ 19,000 Total fixed administrative expense $ 15,000 Beginning merchandise inventory $ 9,000 Ending merchandise inventory $ 24,000 Merchandise purchases $ 86,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 12,000...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 12,000 Selling price per unit $ 17 Variable selling expense per unit $ 1 Variable administrative expense per unit $ 2 Total fixed selling expense $ 19,000 Total fixed administrative expense $ 14,000 Beginning merchandise inventory $ 11,000 Ending merchandise inventory $ 23,000 Merchandise purchases $ 88,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 11,000...
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 11,000 Selling price per unit $ 18 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 1 Total fixed selling expense $ 20,000 Total fixed administrative expense $ 15,000 Beginning merchandise inventory $ 9,000 Ending merchandise inventory $ 22,000 Merchandise purchases $ 86,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
Cherokee Inc. is a merchandiser that provided the following information: Number of units sold 10,000 Selling...
Cherokee Inc. is a merchandiser that provided the following information: Number of units sold 10,000 Selling price per unit $ 17.00 Variable selling expense per unit $ 2.00 Variable administrative expense per unit $ 0.50 Total fixed selling expense $ 21,000 Total fixed administrative expense $ 15,000 Beginning merchandise inventory $ 8,000 Ending merchandise inventory $ 24,000 Merchandise purchases $ 85,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT