Gamma Co Owns 80% of Delta Corp

question 42

Essay

Gamma Co. owns 80% of Delta Corp., and Delta Corp. owns 15% of Gamma Co. The two companies use the treasury stock approach to account for mutual ownership. How should Delta Corp.'s ownership interest in Gamma Co. be accounted for in the consolidation?

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Definitions:

True Value

The actual or accurate value which scientific measurements aim to approximate.

Accurate

The accuracy of a measurement, calculation, or specification in relation to the true value or an agreed-upon standard.

Mass

A measure of the amount of matter in an object, usually measured in grams or kilograms.

Density

The mass of a substance per unit volume, a measure of how much mass is contained in a given volume.