1. Determine the ROA for each hotel before the expansion consideration?

 

2. If the expansion is based on maintaining or improving a hotel's ROA, which hotels would be expanded? Why? 3. Calculate the residual income for each hotel before and after the proposed expansion. Problem 23 The owner of the Martin Motel and Restaurant has asked you to prepare an income statement and balance sheet based on the following: 1. Accounts receivable = $10,000 2. Accounts payable = $15,000 3. Current assets consist of cash, accounts receivable, and inventory 4. Current liabilities consist of only accounts payable 5. Current ratio=1.2 to 1 6. Acid-test ratio = 8 to 1 7. Accounts receivable turnover = 30 times (all sales are credit sales) THE MO IR D