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Exercise 1-6 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
Exercise 1-6 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 | $ | 18 |
Variable selling expense per unit | $ | 2 |
Variable administrative expense per unit | $ | 3 |
Total fixed selling expense | $ | 18,000 |
Total fixed administrative expense | $ | 14,000 |
Beginning merchandise inventory | $ | 8,000 |
Ending merchandise inventory | $ | 25,000 |
Merchandise purchases | $ | 86,000 |
Required:
1. Prepare a traditional income statement.
2. Prepare a contribution format income statement.
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