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Siesta Oil Co. uses the calendar year for financial reporting. In December 2011, the company drilled an exploratory well and paid $305,000 to the contractor.

Siesta Oil Co. uses the calendar year for financial reporting. In December 2011, the company drilled an exploratory well and paid $305,000 to the contractor. On January 20, 2012, the well was determined to be dry and was plugged at an additional cost of $5,000. Siesta Oil Co. issued its financial statements on February 23, 2012. The income statement should include the expense related to this well of:

$0.

$5,000 .

$305,000.

$310,000.

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