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		14,000
Selling price per unit	$	17
Variable selling expense per unit	$	1
Variable administrative expense per unit	$	1
Total fixed selling expense	$	20,000
Total fixed administrative expense	$	14,000
Beginning merchandise inventory	$	10,000
Ending merchandise inventory	$	25,000
Merchandise purchases	$	88,000

Required:

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.