C 0 O eztamheducationcomhmtpxt007 034409c oz ozo Cherokee I

-> C 0 O eztamheducation.com/hm.tpxt-0:07. 034409c oz. ozo Cherokee Inc is a merchandiser that provided the tollowing intormation 11,000 17 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 S 19,000 S 16,000 $ 10,000 $ 26,000 S 87,000 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 Net operatingincome 2 Prepare a contribution format income statement CHEROKEE, INC Contribution Format Income Statement Sales Variable expenses Cost of goods sold Selling expenses Administrative expenses margin Fixed expenses Seling expenses

Solution

Answer = 1 Traditional Income Statement Particulars Amount Amount Sales (11000 Units X $ 17 Per unit) $ 1,87,000.00 Less: Cost of Goods Sold Beginning Merchandise inventory $ 10,000.00 Add: Purchases $ 87,000.00 Less: Closing Merchandise Inventory $ 26,000.00 $      71,000.00 Gross Margin $ 1,16,000.00 Sellign and administrative Expenses Variable Selling Expenses(11000 units X $ 1 Per unit) $ 11,000.00 Fixed Selling Expenses $ 19,000.00 Variable Administrative Expenses(11000 units X $ 3 Per unit) $ 33,000.00 Varibalbe Administrative Expenses $ 16,000.00 $      79,000.00 Net Operating Income $      37,000.00 Answer = 2) INCOME STATEMENT IN THE CONTRIBUTION FORMATE Particulars Amount Amount Sales (11000 Units X $ 17 Per unit) $ 1,87,000.00 LESS: VARIABLE EXPENSES Cost of Goods Sold Beginning Merchandise inventory $ 10,000.00 Add: Purchases $ 87,000.00 Less: Closing Merchandise Inventory $ 26,000.00 $      71,000.00 Selling Expenses (11000 units X $ 1 Per unit) $      11,000.00 Administrative Expenses(11000 units X $ 3 Per unit) $      33,000.00 Contribution Margin $      72,000.00 Less: Fixed Expenses : Selling Expenses $      19,000.00 Administrative Expenses $      16,000.00 Net Operating Income $      37,000.00