Cherokee Inc. is a merchandiser that provided the following informati Amount 13,

Question

Cherokee Inc. is a merchandiser that provided the following informati Amount 13,000 16 Number of units sold Selling price per unit Variable selling expense per unit Variable administrative expense per unit Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases 19,00e $ 15,e00 $ 9,00e $ 24,00e $86,0060 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Complete this question by entering your answers in the tabs belo Required 1 Required 2 Prepare a contribution format income statement.

Explanation / Answer

1.

2.

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Cherokee Inc. Income Statement (Traditional) Sales (13,000*$16) $ 208,000 Less: cost of goods sold ($9,000+$86,000-$24,000) $    71,000 Gross profit $ 137,000 Less: Selling and administrative expenses Selling expenses ($1*13,000)+$19,000) $ 32,000 Administrative expenses ($2*13,000+$15,000) $ 41,000 Total selling and administrative expenses $    73,000 Net income $    64,000

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