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

Cherokee Inc. 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	$	20,000
Total fixed administrative expense	$	16,000
Beginning merchandise inventory	$	9,000
Ending merchandise inventory	$	23,000
Merchandise purchases	$	87,000

Required:

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.