Cherokee Inc. is a merchandiser that provided the following information: 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 Amount 10,000 $ 16 $ 1 $ 3 $ 20,000 $ 14,000 $ 11,000 $ 22,000 $ 87,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Prepare a traditional income statement. Cherokee, Inc. Traditional Income Statement Sales $ 160,000 75,000 85,000 $ Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Selling expenses Administrative expenses Administrative expenses Net operating income 10,000 20,000 14,000 30,000 74,000 11,000 $ Required 2 > Cherokee, Inc. Contribution Format Income Statement Sales $ 160,000 $ Variable expenses: Cost of goods sold Selling expenses Administrative expenses 75,000 10,000 14,000 99,000 61,000 Selling expenses Contribution margin Fixed expenses: Selling expenses Administrative expenses 20,000 30,000 50,000 11,000 Net operating income $