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In: Accounting

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 Statement
Sales $187,000
Cost of goods sold ?
Gross margin ?
Selling and administrative expenses: ?
Selling expenses ?
Administrative expenses ?
0
Net operating income ?
Cherokee, Inc.
Contribution Format Income Statement
Variable expenses:
Sales ?
Cost of goods sold ?
Selling expenses ?
Administrative expenses ?
0
Contribution margin ?
Fixed expenses:
Selling expenses ?
Administrative expenses.    ?
0
Net operating income ?

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