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

Number of units sold13,000

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 $16,000

Beginning merchandise inventory $10,000

Ending merchandise inventory $22,000

Merchandise purchases $90,000

Required:

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.