Are dividends irrelevant in equity method?

Hello! Very grateful to this group. I thought dividends reduced equity, such that the answer would involve 30% of $40k earnings less 30% of dividends ($7.5k)? How do dividends figure into the IS or BS of a parent company using the equity method? Clearly I am missing something. Thank you!

Hello! Very grateful to this group. I thought dividends reduced equity, such that the answer would involve 30% of $40k earnings less 30% of dividends ($7.5k)? How do dividends figure into the IS or BS of a parent company using the equity method? Clearly I am missing something. Thank you!