Exercise 1-6 Traditional and Contribution Format Income Statements [LO1-6]

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

	Amount
Number of units sold		11,000
Selling price per unit	$	16
Variable selling expense per unit	$	2
Variable administrative expense per unit	$	2
Total fixed selling expense	$	19,000
Total fixed administrative expense	$	15,000
Beginning merchandise inventory	$	12,000
Ending merchandise inventory	$	24,000
Merchandise purchases	$	88,000

Required:

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.

Complete this question by entering your answers in the tabs below.

Prepare a traditional income statement.

Cherokee, Inc. Traditional Income Statement Sales $176,000 Cost of goods sold (76,000) Gross margin 100,000 Selling and administrative expenses: Administrative expenses Selling expenses 0 Net operating income Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a contribution format income statement. Cherokee, Inc. Contribution Format Income Statement Variable expenses: 0 Fixed expenses: 0