Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 11,000 Selling price per unit $ 18 Variable selling expense per unit $ 1 Variable administrative expense per unit $ 2 Total fixed selling expense $ 22,000 Total fixed administrative expense $ 14,000 Beginning merchandise inventory $ 10,000 Ending merchandise inventory $ 24,000 Merchandise purchases $ 86,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.

Cherokee, Inc.
Traditional Income Statement
Sales		$ 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:
		0
Fixed expenses:
		0