5. value: 3.00 points Exercise 2-6 Traditional and Contribution Format Income Statements [LO2-6] 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 12.000 17.00 1.00 1.50 20.000 16,000 8,000 25,000 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: 204,000 70,000 25,000 Selling expenses 224,000 34,000 Administrative expenses 258,000 Ending merchandise inventory Net operating income 2. Prepare a contribution format income statement. CHEROKEE, INC. Contribution Format Income Statement $ Sales 204,000 Variable expenses: Cost of goods sold $ 70,000 12,000 Selling expenses Administrative expenses 18,000 100,000 Contribution margin Fixed expenses: Selling expenses 20,000 Administrative expenses 16,000 36,000 Net operating income