Cherokee Inc. is a merchandiser that provided the following information: Number of units sold 10,000 Selling price per unit $ 17.00 Variable selling expense per unit $ 2.00 Variable administrative expense per unit $ 0.50 Total fixed selling expense $ 21,000 Total fixed administrative expense $ 15,000 Beginning merchandise inventory $ 8,000 Ending merchandise inventory $ 24,000 Merchandise purchases $ 85,000 Required:

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.