Application of the equity method requires the accrual of invested income by the parent while any dividends from the investee are recorded as a decrease in the Investment account. Arch must also reduce both the income and asset balances in recognition of the annual $2,000 amortization indicated in Exhibit 4.10. Following the information provided in Exhibits 4.9 and 4.10, over the next two years, Arch Company's Investment in Zion account grows to $190,000: