Final answer:
The correct answer is option b. Johnson, Inc. is considered to have a significant influence over Flavor Co. if it holds between 20% and 50% of Flavor Co.'s stock. The correct multiple-choice option indicating a significant influence without indicating control is b) 45%. Other factors can also play a role in establishing significant influence beyond share percentage.
Step-by-step explanation:
If Johnson, Inc. holds equity securities in Flavor Co. with a significant influence, it typically means that Johnson, Inc. must hold a significant percentage of Flavor Co.'s stock, although the exact percentage can vary based on context and regulatory definitions. According to accounting standards, a significant influence is often presumed to exist when an investor holds between 20% and 50% of the voting power of the investee. However, it should be noted that significant influence can also be indicated by other factors such as representation on the board of directors, participation in policy-making processes, and material intercompany transactions.
Given the multiple-choice options available: a) 65%, b) 45%, and c) 55%, the correct option reflecting a significant influence, without surpassing the typical threshold for control, is b) 45%. Option a) falls outside the generally accepted range, and c) generally implies control rather than just significant influence, as it exceeds the upper boundary of the 50% threshold.