=+LG 4 P18–12 Holding company Scully Corporation holds enough stock in company A and company B to give it voting control of both firms. Consider the accompanying simplified balance sheets for these companies.

Assets Liabilities and stockholders’ equity Scully Corporation Common stock holdings Long-term debt $ 40,000 Company A $ 40,000 Preferred stock 25,000 Company B 60,000 Common stock equity 35,000 Total $100,000 Total $100,000 Company A Current assets $100,000 Current liabilities $100,000 Fixed assets 400,000 Long-term debt 200,000 Total $500,000 Common stock equity 200,000 Total $500,000 Company B Current assets $180,000 Current liabilities $100,000 Fixed assets 720,000 Long-term debt 500,000 Total $900,000 Common stock equity 300,000 Total $900,000