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Cherokee Inc. is a merchandiser that provided the following information:
Amount
Number of units sold 14,000
Selling price per unit $ 15
Variable selling expense per unit $ 2
Variable administrative expense per unit $ 2
Total fixed selling expense $ 20,000
Total fixed administrative expense $ 14,000
Beginning merchandise inventory $ 11,000
Ending merchandise inventory $ 26,000
Merchandise purchases $ 86,000
Required:
1. Prepare a traditional income statement.
2. Prepare a contribution format income statement.
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