Company X owns 30% of Company Y and exercises significant influence. In Year 1, Company Y reported net income of $100,000 and paid dividends of $20,000. Under the equity method, what is the impact on Company X's Investment account?

Under the equity method (ASC 323), the investor records its share of the investee's earnings as an increase to the investment account ($100,000 × 30% = $30,000). Dividends received are treated as a return of investment and reduce the investment account ($20,000 × 30% = $6,000). Net change = +$30,000 - $6,000 = +$24,000.