Cherokee Incorporated is amerchandiser that provided thefollowing information: AmountNumber of units sold 10,000 Sellingprice per unit $ 16 Variable sellingexpense per unit $2 Variableadministrative expense per unit $ 1Total fixed selling expense $ 19,000Total fixed administrative expense $16,000 Beginning merchandiseinventory $ 11,000 Endingmerchandise inventory $ 23,000Merchandise purchases $ 87,000Required: 1. Prepare a traditionalincome statement. 2. Prepare acontribution format incomestatement.

Lets understand the basics.In traditional income statement, gross profit gets derived by deducting…

Answered: Cherokee Incorporated is a merchandiser…

Cherokee Incorporated is a merchandiser that provided the following information: Amount Number of units sold 10,000 Selling

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Cherokee Incorporated is a
merchandiser that provided the
following information: Amount
Number of units sold 10,000 Selling
price per unit $ 16 Variable selling
expense per unit $2 Variable
administrative expense per unit $ 1
Total fixed selling expense $ 19,000
Total fixed administrative expense $
16,000 Beginning merchandise
inventory $ 11,000 Ending
merchandise inventory $ 23,000
Merchandise purchases $ 87,000
Required: 1. Prepare a traditional
income statement. 2. Prepare a
contribution format income
statement.

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