Fanelli Corporation, a merchandising company, reported the following results for July: Cost of goods sold is a variable cost in this company.
Required:
a.Prepare a traditional format income statement for July.
b.Prepare a contribution format income statement for July.

Traditional Format

A foundational approach to accounting and finance that emphasizes historical cost accounting, generally accepted accounting principles (GAAP), and the use of financial statements.

Contribution Format

The contribution format is an income statement presentation that separates fixed costs from variable costs, highlighting the contribution margin.

Cost Of Goods Sold

The direct costs attributable to the production of the products sold in a company, including both materials and labor costs.