Cherokee Incorporated is a merchandiser that provided the following information: AmountNumber of units sold11,000Selling price per unit$ 17Variable selling expense per unit$ 1Variable administrative expense per unit$ 3Total fixed selling expense$ 19,000Total fixed administrative expense$ 15,000Beginning merchandise inventory$ 9,000Ending merchandise inventory$ 25,000Merchandise purchases$ 87,000 Required:1. Prepare a traditional income statement.2. Prepare a contribution format income statement.

Income statement represents the operational results of a business organization for a definite…

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Business

Accounting

income statement

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	11,000
Selling price per unit	$ 17
Variable selling expense per unit	$ 1
Variable administrative expense per unit	$ 3
Total fixed selling expense	$ 19,000
Total fixed administrative expense	$ 15,000
Beginning merchandise inventory	$ 9,000
Ending merchandise inventory	$ 25,000
Merchandise purchases	$ 87,000

Required:

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.

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