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Question 3(1 point) ABC Corporation Inc. (ABC) owns 60% of the voting common...

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Accounting

Question 3(1 point)
ABC Corporation Inc. (ABC) owns 60% of the voting common shares of Reich Corporation Ltd.(RCL), while TieCo owns 25%, and Platinum Inc. (PI) owns the remaining 15%. ABC has significant intercompany transactions with RCL. TieCo and PI have no intercompany transactions with RCL. ABC appoints eight of RCL's 10 board members; TieCo and PI each appoint one board member. Which of the following statements is true?
TieCo has no influence over RCL and should classify their investment in RCL as a passive investment.
ABC should classify its investment in RCL as an associate since it does not have control of RCL.
TieCo and PI have significant influence over RCL.
TieCo has significant influence over RCL.
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