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1. 8. BONUS: Nilam Patel is the primarystockholder in two hotel corporations. One corporation owns a90?room economy property located in the suburbs of a large westerntown. The other corporation is a 350?room full?service conventionhotel in the downtown city center for which Nilam has employed amanagement company to operate the property. Nilam is preparingbalance sheets for both properties using a common size format.Complete the two balance sheets. Then answer the questions thatfollow.

   Nilam Patel's Two Hotel's Balance Sheets

   	December 31		Common Size
   	90?Room Property	350?Room Property	90?Room Property (%)	350?Room Property (%)
   ASSETS
   Current Assets
   Cash
   Cash inHouse Banks		$86,000
   Cash inDemand Deposits	85,000	330,250
   TotalCash	103,500	416,250
   Short?Term Investments	56,000	165,000
   Receivables
   AccountsReceivable	150,000	327,150
   NotesReceivable	35,000	136,250
   Other	750	30,800
   TotalReceivables	185,750	494,200
   LessAllowance for Doubtful Accounts	19,250
   NetReceivables	166,500	431,900	1.4	1.1
   Due fromManagement Company	—	50,000	0.0	0.1
   FoodInventories	15,125	69,750	0.1	0.2
   BeverageInventories	—	42,550	0.0	0.1
   Gift ShopInventories	300	6,950	0.0	0.0
   SuppliesInventories	6,550	13,550	0.1	0.0
   PrepaidExpenses	56,000	120,100	0.5	0.3
   DeferredIncome Taxes—Current	48,000	135,000	0.4	0.3
   TotalCurrent Assets
   Investments	72,500	274,150	0.6	0.7
   Property and Equipment
   Land	2,000,000	8,450,000
   Building	6,500,000	18,500,000
   Leaseholds and Leaseholdimprovements	2,037,250	5,850,000
   Furnishings and Equipment	1,288,000	3,105,000
   TotalProperty and Equipment	11,825,250	35,905,000
   Less Accumulated Depreciation andAmortization	575,000	2,575,000
   NetProperty and Equipment	11,250,250	38,480,000
   Other Assets
   Intangible Assets	—	75,000	0.0	0.2
   Deferred Income Taxes—Non?current	66,000	158,000	0.6	0.4
   Operating Equipment	35,100	111,000	0.3	0.3
   Restricted Cash	25,000	95,000	0.2	0.2
   TotalOther Assets	126,100	439,000	1.1	1.1
   TOTAL ASSETS			100.0	100.0
   LIABILITIES AND OWNERS' EQUITY
   Current Liabilities
   Notes Payable
   Banks	17,500	116,250	0.1	0.3
   Others	8,000	17,500	0.1	0.0
   TotalNotes Payable	25,500	133,750	0.2	0.3
   Accounts Payable	2,500	125,100
   Accrued Expenses	45,000	42,500
   Advance Deposits	500	42,250
   Income Taxes Payable	15,000	78,000
   Deferred Income Taxes—Current	40,000	235,000
   Current Maturities of Long?TermDebt	420,000
   Other	50,000	58,000
   TotalCurrent Liabilities	598,500	2,399,600	5.0	5.9
   Long?term Debt, Net of Current Maturities
   Mortgage Note		24,383,030
   Obligations Under Capital Leases	18,000	385,000	0.2	0.9
   TotalLong?Term Liabilities	6,868,000
   Owners' Equity
   Common Stock	500,000	2,000,000
   Paid in Capital		8,711,500
   Retained Earnings	879,325	2,765,070
   TotalOwners' Equity	4,434,325	13,476,570
   TOTAL LIABILITIES AND OWNERS' EQUITY			100	100

   1. What was the amount of cash in the 90?room property's Cash inHouse Banks account at year end?
   2. What is the amount of Allowance for Doubtful Accounts in the350?room property? Do you think it is excessive? Explain youranswer?
   3. What would explain the lack of a beverage inventory value inthe 90?room hotel?
   4. What was the dollar amount of Total Assets in the 90?roomhotel?
   5. What was the dollar amount of Total Assets in the 350?roomhotel?
   6. What was the dollar amount of Current Maturities of Long?TermDebt in the 350?room property? Why is that amount likely so muchhigher than for the 90?room property?
   7. What was the dollar amount of Paid in Capital for the 90?roomproperty?
   8. What is the Owners' Equity percentage of Total Assets in the90?room property? What is it in the 350?room property?