Avery Company acquires the net assets of Iowa Company on July 1, 2011. The net assets acquired include plant assets that are provisionally estimated to have a fair value of $600,000 with a 10-year usable life and no salvage value. Depreciation is recorded based on months in service. The remaining unallocated amount of the price paid is $300,000, which is recorded as goodwill.
At the end of 2011, Avery prepares the following statements (includes Iowa Company for the last six months):

In March 2012, the final estimated fair value of the acquired plant assets is $700,000 with no change in the estimate of useful life or salvage value.
1. Prepare any journal entries required in March 2012.
2. Prepare the revised balance sheet and income statement for 2011 that will be included in the 2012 comparative statements.

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Balance Sheet 300,000 Crnt liabilities.... 600,000 Bonds payable Current assets. . . Equipment (net . Plant assets (net. Goodwill 300,00 500,000 50,00 1,300,000 650,00 1,600,000 Common stock ($1 par 300,000 Paid-in capital in excess of par Retained earnings Toa liabilities and equity Total assets.... $2,800,000 $2,800,000 Summary Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses Depreciation expense Net income $800,000 520,000 $280,000 $150,000 80,000 230,000 50,000