Cherokee Incorporated is a merchandiser that provided the following information: 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 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Amount 12,000 $ 15 $1 $2 $ 22,000 $ 15,000 $ 10,000 $ 23,000 $ 89,000
Cherokee Incorporated is a merchandiser that provided the following information: 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 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Amount 12,000 $ 15 $1 $2 $ 22,000 $ 15,000 $ 10,000 $ 23,000 $ 89,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Cherokee Incorporated is a merchandiser that provided the following information:
Amount
12,000
$ 15
$1
$2
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
Required:
1. Prepare a traditional income statement..
2. Prepare a contribution format income statement.
$ 22,000
$ 15,000
$ 10,000
$ 23,000
$ 89,000
Transcribed Image Text:Required 1 Required 2
Prepare a traditional income statement.
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses:
Administrative expenses
Selling expenses
Net operating income
Cherokee, Incorporated
Traditional Income Statement
Required 1 Required 2
Prepare a contribution format income statement.
Sales
Variable expenses:
Fixed expenses:
<Required 1
Cherokee, Incorporated
Contribution Format Income Statement
< Required 1
0
0
0
Required 2 >
Required 2 >
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