Exercise 1-6 (Algo) Traditional and Contribution Format IncomeStatements [LO1-6]
Cherokee Inc. is a merchandiser that provided the followinginformation:
| | 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.
