Von Company properly applies the equity method in accounting for its investment in Neumann Inc. Which of the following statements are correct?
1) Statement 1: The equity method is used when the investor has significant influence over the investee.
2) Statement 2: Under the equity method, the investor records its share of the investee's net income as an increase in its investment account.
3) Statement 3: The investor recognizes its share of the investee's dividends as a reduction in its investment account.
4) Statement 4: The investor does not adjust the carrying value of its investment for its share of the investee's net income or dividends.
5) Statement 5: The equity method is only applicable to investments in pubLiCly traded companies.