1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Required 1
Required 2
Prepare a contribution format income statement.
Cherokee, Inc.
Contribution Format Income Statement
Sales
2$
176,000
Variable expenses:
Cost of goods sold
75,000
Selling expenses
Administrative expenses
11,000
33,000
119,000
Fixed expenses:
Selling expenses
20,000
Administrative expenses
14,000
34,000
Net operating income
2$
23,000

Transcribed Image Text:Cherokee Inc. is a merchandiser that provided the following information:
Amount
11,000
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
24
$
$ 3
$20,000
$14,000
$10,000
$24,000
$89,000
1
Required:
1. Prepare a traditional income statement.
2. Prepare a contribution format income statement.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare a traditional income statement.
Cherokee, Inc.
Traditional Income Statement
Sales
24
176,000
Cost of goods sold
75,000
Gross margin
101,000
Selling and administrative expenses:
Selling expenses
2$
31,000
Administrative expenses
47,000
78,000
Net operating income
24
23,000
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