Exercise 1-6 (Algo) Traditional and Contribution Format Income Statements [LO1-6]

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

$ 2 Total fixed selling expense $ 20,000

Total fixed administrative expense $ 16,000

Beginning merchandise inventory $ 12,000

Ending merchandise inventory $ 26,000

Merchandise purchases $ 88,000

Required: 1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.

Required 1

Prepare a traditional income statement.

Cherokee, Incorporated Traditional Income Statement

Selling and administrative expenses:

Required 2

Prepare a contribution format income statement.

Cherokee, Incorporated Contribution Format Income Statement

Variable expenses:

Fixed expenses: