The trial balances of charles Company and its subsidiary, Letho, Inc., are as follows on December 31, 2013:

                                                                                Charles                                   Lehto

Current Assets...................................................... 590,000                                    130,000

Depreciable Fixed Assets.................................... 1,805,000                                   440,000

Accumulated Depreciation.................................... (405,000)                                 (70,000)

Investment in Lehto, Inc........................................ 400,000

Liabilities .............................................................. (900,000)                                 (225,000)

Common stock ($1 par) ....................................... (200,000)               

Common Stock ($5 Par)........................................                                                  (50,000)

Paid in Capital in Excess of par............................. (1,040,000)                              (15,000)

Retained Earnings, January 1, 2013...................... (230,0000                               (170,000)

Revenues............................................................... (460,000)                                (210,000)

Expenses................................................................ 450,000                                   170,000

Dividends Declared................................................... 10,000                                                   

Totals..............................................................                 0                                                 0

On January 1, 2011 Charles Company exchanges 20,000 shares of its common stock, with a fair value of $20 per share, for all the outstanding stock of Lehto, Inc. Fixed assets with 10-year life understated by 50,000. Any excess of cost over book value is attributed to goodwill. The stockholders' equity of Lehto, Inc., on purchase date is as follows:

Common stock ($5 par)....................................... $    50,000

Paid-in capital in excess of par............................       15,000

Retained earnings.................................................     135,000

Total equity.....................................................       $200,000

1) prepare a determination and distribution of excess schule for investment. (A value analysis schedule is not needed.)

2) prepare the 2013 consolidated statements, includeing the income statement, retained earnings statement, and balance sheet