Question

Traditional income statement and contributed format income statement?

Cherokee Inc. is a merchandiser that provided the following information Amount 13,000 15 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 20,000 $ 14,000 $ 10,000 $ 24,000 $ 87,000 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 Selling and administrative expenses: Required 1 Required 2 >

Answer 1

Answer:

1. Traditional
Cherokee Inc.
Traditional Income Statement
Revenue		(195,000)
Cost of Goods Sold:
Purchase		87,000
Selling and Administrative Expses:
Variable:
Variable Selling Expense	26,000
Variable Administrative Expense	13,000	39,000
Fixed:
Fixed Selling Expense	20,000
Fixed Administrative Expense	14,000	34,000
Profit		(35,000)

2. Contribution Format
Cherokee Inc.
Traditional Income Statement
Revenue		(195,000)
Variable:
Purchase		87,000
Variable Selling Expense	26,000
Variable Administrative Expense	13,000	39,000
Contribution		(69,000)
Fixed:
Fixed Selling Expense	20,000
Fixed Administrative Expense	14,000	34,000
Profit		(35,000)