Cherokee Inc. is a merchandiser that provided the following Information: Amount 13,000 17 Number of units sold Selling price per unit Variable selling expense per unit Variable administrative expense per unit Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases $ 18.000 $ 14.000 $ 10.000 $26.000 $ 86,000 Required: 1. Prepare a traditional Income statement. 2. Prepare a contribution format income statement. Required 1 Required 2 Prepare a traditional income statement. $ 221,000 (70,000) Cherokee, Inc. Traditional Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses S (27,000) Administrative expenses (31,000) 151,000 (58,000) 93,000 Net operating income $ Required 1 Required 2 Prepare a contribution format income statement. S 221.000 Cherokee, Inc. Contribution Format Income Statement Sales Variable expenses: Cost of goods sold $ 75,000 Administrative expenses (13,000) Selling expenses (13,000) 49,000 96.000 Contribution margin Fixed expenses: Administrative expenses Selling expenses (14,000) (18,000) (32,000) 64,000 Net operating income $