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

Number of units sold 13,000 Selling price per unit $ 16.00 Variable selling expense per unit $ 2.00 Variable administrative expense per unit $ 0.50 Total fixed selling expense $ 20,000 Total fixed administrative expense $ 14,000 Beginning merchandise inventory $ 12,000 Ending merchandise inventory $ 25,000 Merchandise purchases $ 87,000

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.