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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
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 12,000 $ 15 $ 1 s 3 $ 19,000 $ 14,000 $ 11,000 $ 25,000 $ 86,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. * Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a traditional income statement. Cherokee, Inc. Traditional Income Statement Sales $ 180,000 72,000 108,000 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses $ 12,000 x 36,000 48,000 Net operating income > $ 60,000 Required 1 Required 2 > Required 1 Required 2 Prepare a contribution format income statement. Cherokee, Inc. Contribution Format Income Statement Sales $ 180,000 Variable expenses: Purchases x $ 86,000 Selling expenses Administrative expenses 12,000 36,000 134,000 Contribution margin 46,000 X Fixed expenses: Selling expenses 19,000 Administrative expenses 14,000 33,000 Net operating income $ 13,000
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