Morton Company acquires 27 percent of the outstanding stock of Fallon Inc. Bully Company holds the other 73 percent of Fallon and pays no attention to the ideas and suggestions put forth by Morton. Which of the following is true about Morton's reporting of this investment? The equity method should be applied because Morton holds 20-50 percent of the shares of Fallon. The equity method should not be applied because Morton only holds 27 percent of the shares of Fallon The equity method should be applied because Morton has significant influence over Fallon. The equity method should not be applied because Morton does not have significant influence over Fallon.