Question

Cherokee Inc. 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 13,000 S 17.00 2.00 $1.00 $19,000 $ 16,000 S 8,000 $ 25,000 $88,000 Required: 1. Prepare a traditional income statement CHEROKEE, INC. Traditional Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Administrative expenses Selling expenses S 221,000 Net operating income

Answer 1

tva delional Scom statemen 13,000 /7/Unit) 221,000 Less Cost ot goods sol BeginniNg vento Puxchases 800 O Add $8,00 o Less Cas,000) ($TI,ooo) 150,00O Less Sellivg and Admi pnse Selling expenses (Qx 13,000-+ 19,000 45o0 o AdmiN xpenes CT ¥ 13,000 t 16,000) 29000 et oprvatiN iNcome Conhibutian Fom at Sales Vaviable expen ses Cost ot go0o ds Sold ellig xpenses AdmiN Expenses 71,OOO 6, 00o 13, 00 O (110,000 Less Fixed expen se s selling expenses Admin expenses (9,00 O 35, oo o