Question

(dont pay attention to the filled out labels or numbers they may be wrong)
Cherokee Inc. is a merchandiser that provided the following information: Amount 14,000 16 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 $ 13,000 $ 12,000 $ 24,000 $ 88,000 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.

Answer 1

Chenokee Inc Tradi'tional Income Statement 224000 $ 76,000 Sales Less: Cost ot goods AoLd GYOss margin 148,000 Selli'ng and administrative expenses: 34,000 $55,000 Selling expenses A dminis trative expenses $ 89/000 459,000 Net opesating ineome Cherokee Ine Conthibution format Income Statement $224,000 Sales Variable expenses 76,000 Cost of goods 40ld $14,000 Selling epenses Administrative expenses 542,000 $132/000 921000 Contributibn margin Piired enpenses Selling expenses Administrative expenses $20,000 13,000 $33,000 159,00 Net operating income

Calulation: Sales Seumg Pmce per unit x Number ot units Aold $16 per unit X 14,000 units 224,000 inventory meschandise inv entory Ending Cost ot goods sold = beginning + Merchandise purchases merchandise 市 121000 +489,000-$24,000 476,000 1 11 seling eepenses per unit Numb er o% units sold t Total fixed beling enpen Selling expenses 7 Vanable 1 pes unit X 14000 units t 20,0 00 + $34,000 Admenistratve expenses Vartable administrative expenses per unit XNumber e units sold t total fixed adminis terati've en pense h 3 per unit X 4,000 units t13000 55000 - Begining PurchasesEnding merchandise inu en tory 12,000 t38800 0-24,000 d Cost of goods old +Merchandis e fnventory mes chandise 76,000 Varlable selling expenses per unit X Selling expenses Number e units Molo $1 per unit X 141000 units 14,000 Van'able admihustrative expense per unit 1 Administractive expenses X Numbes ef units Aold 3per unit X 14,p0o units 42/000 1