Cherokee Incorporated is a merchandiser that provided the following information:

	Amount
Number of units sold	13,000
Selling price per unit	$ 17
Variable selling expense per unit	$ 1
Variable administrative expense per unit	$ 3
Total fixed selling expense	$ 21,000
Total fixed administrative expense	$ 13,000
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.

Required 1 Required 2 Prepare a traditional income statement. $ Cherokee, Incorporated Traditional Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses 221,000 72,000 149,000 0 Net operating income Required 1 Required 2 Prepare a contribution format income statement. $ 221,000 Cherokee, Incorporated Contribution Format Income Statement Sales Variable expenses: Cost of goods sold Selling expenses 13,000 Administrative expenses 39,000 52,000 Contribution margin Fixed expenses: Selling expenses Administrative expenses 21,000 13,000 34,000 Net operating income