Cherokee Inc. is a merchandiser that provided the following information:

Required:
1. Prepare a traditional income statement.
2. Prepare a contribution format income statement.

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Amount Number of units sold....... 20,000 Selling price per unit... $30 Variable selling expense per unit.. $4 Variable administrative expense per unit. $2 Total fixed selling expense... $40,000 Total fixed administrative expense $30,000 Beginning merchandise inventory $24,000 Ending merchandise inventory.. $44,000 Merchandise purchases.... $180,000