(Solved by Humans)-Black Gold Inc. (BG), an SEC registrant with a calendar year-end,

Question

Black Gold Inc. (BG), an SEC registrant with a calendar year-end, constructs andoperates offshore oil platforms. BG is legally required to dismantle and remove theplatforms at the end of their useful lives, which generally are estimated to be 10 years.As of January 1, 20X1, BG constructed and began operating an offshore oil platform offthe coast of Alaska. The total capitalized cost of constructing the platform was $1million, which is being depreciated straight-line over 10 years. Concurrently with thecapitalization of the construction cost, and in accordance with FASB Statement No. 143,Accounting for Asset Retirement Obligations, BG recognized a liability for an assetretirement obligation (ARO) associated with the dismantling of the platform. Theamount of $100,000 represented BG's estimate of the initial fair value of the liabilityusing an expected present value technique. Upon initial recognition of the ARO, an assetretirement cost (ARC) of an equal amount was established as an asset and was includedwith the carrying amount of the related oil platform in BG's balance sheet. BGdetermined that the straight-line method of depreciation over the 10-year useful life of theoil platform represented a systematic and rational allocation method for the ARC.As of December 31, 20X8, as a result of depreciation and through application of theinterest method of allocation (i.e., accretion expense), the net carrying value of the oilplatform is $200,000, the ARC is $20,000, and the ARO is $175,000. In the first quarterof 20X9, because of certain changes in the marketplace for labor cost, BG revised itsestimate of labor cost to dismantle the oil platform, which caused a downward adjustmentto the ARO of $50,000, resulting in an ARO balance of $125,000.

Required:

Question 1 ? How should BG account for the offsetting entry relating to the $50,000downward adjustment recorded to the ARO in its balance sheet for the first quarterending March 31, 20X9?

Question 2 ? In what period(s) and what amount(s) should BG account for the decreaserelating to the $50,000 downward adjustment recorded to the ARO in its incomestatement?

I need specific Codification guidance that supports the conclusion for both questions? Also I have seen the previously posted answer on word and it is very poorly presented and confusing, so please dont ?copy paste. Please provide a well presented and supported answer.