On January 1, 2012, the organizers of the Parsons Corporation obtained their charter and issued 10,000 shares of $1 par common stock for $4 per share. During 2012, the corporation earned $30,000 in cash revenue and paid $20,000 in cash expenses, not including income tax. The income tax rate was 30%, and the company's income tax expense was $3,000. The company declared and paid cash dividends totaling $2,000. Using the above information, prepare an income statement and a balance sheet for the Parsons Corporation.

Problem 8 (6 points)

Houston Corporation has the following stock outstanding:

In 2012, Houston paid $330,000 in dividends. No dividends were paid in 2011 or 2010. Required: a) Compute the total amount of dividends that was paid to each class of stock. b) Compute the amount of dividends per share for each class of stock.

5% cumulative preferred stock, par $20 $1,000,000 (50,000 shares issued and outstanding) Common stock, par $5 2,000,000 (400,000 shares issued and outstanding)