EXHIBIT 99.10





                      TELLURIDE RESORT ACCOMMODATIONS, INC.

                      FINANCIAL STATEMENTS
                      AS OF  DECEMBER 31, 1997 AND MAY 26, 1998
                      TOGETHER WITH REPORT OF INDEPENDENT
                          PUBLIC ACCOUNTANTS


<PAGE>




                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Telluride Resort Accommodations, Inc.:

We  have  audited  the   accompanying   balance   sheet  of   Telluride   Resort
Accommodations,  Inc. (a Colorado  corporation)  as of December 31, 1997 and May
26, 1998,  and the related  statements of operations,  changes in  stockholders'
deficit and cash flows for the year ended  December 31, 1997 and the period from
January  1,  1998  to  May  26,  1998.   These  financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all   material   respects,   the   financial   position  of   Telluride   Resort
Accommodations,  Inc., as of December 31, 1997 and May 26, 1998, and the results
of its  operations  and its cash flows for the year ended  December 31, 1997 and
the period from January 1, 1998 to May 26, 1998,  in conformity  with  generally
accepted accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
July 15, 1998


<PAGE>



                      TELLURIDE RESORT ACCOMMODATIONS, INC.

                                 BALANCE SHEETS

                        (In thousands, except share data)
<TABLE>
<CAPTION>

                                                                                    December 31,            May 26,
                                    ASSETS                                              1997                  1998
                                    ------                                        -------------           -----------

<S>                                                                                   <C>                    <C>  
CURRENT ASSETS:
    Cash and cash equivalents                                                         $2,103                 $ 358
    Accounts receivable                                                                  392                   475
    Due from property owners                                                             152                     -
    Prepaid expenses and other current assets                                             12                    34
                                                                                     -------                 -----
              Total current assets                                                     2,659                   867

PROPERTY AND EQUIPMENT, net                                                               62                   109
                                                                                     -------                 -----

              Total assets                                                            $2,721                 $ 976
                                                                                       =====                  ====


                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                ----------------------------------------------

CURRENT LIABILITIES:
    Current portion of long-term debt                                             $      -                 $    14
    Line of credit                                                                       194                    -
    Customer deposits and deferred revenue                                             2,096                   500
    Payable to property owners                                                           640                    -
    Payable to stockholders                                                              -                      22
    Accounts payable and accrued liabilities                                             209                   297
                                                                                     -------                 -----
              Total current liabilities                                                3,139                   833

LONG-TERM DEBT                                                                           -                      34

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
    Common stock, no par; 1,000,000 shares authorized;
       15,000 shares outstanding                                                         216                   216
    Retained deficit                                                                    (634)                 (107)
                                                                                     -------                 -----
              Total stockholders' equity (deficit)                                      (418)                  109
                                                                                     -------                 -----
              Total liabilities and stockholders' equity (deficit)                    $2,721                 $ 976
                                                                                       =====                  ====
</TABLE>



   The accompanying notes are an integral part of these financial statements.


<PAGE>





                      TELLURIDE RESORT ACCOMMODATIONS, INC.

                            STATEMENTS OF OPERATIONS
                                 (In thousands)
   
<TABLE>
<CAPTION>
                                                                                                       January 1 
                                                                                 Year Ended             through
                                                                                December 31,            May 26,
                                                                                    1997                  1998
                                                                                -------------        -------------
<S>                                                                                   <C>             C>   
REVENUES:
    Property rental fees                                                             $ 3,204           $2,101
    Service fees                                                                       1,109              648
                                                                                     -------          -------
              Total revenues                                                           4,313            2,749

OPERATING EXPENSES                                                                     3,037            1,575

GENERAL AND ADMINISTRATIVE EXPENSES                                                    1,030              458
                                                                                     -------          -------
    Income from operations                                                               246              716

INTEREST INCOME, net                                                                      31               35
                                                                                     -------          -------
NET INCOME                                                                           $   277          $   751
                                                                                     ======           =======
</TABLE>
    



   The accompanying notes are an integral part of these financial statements.


<PAGE>






                      TELLURIDE RESORT ACCOMMODATIONS, INC.

             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                        (In thousands, except share data)
<TABLE>
<CAPTION>
                                                                       Common Stock            Retained
                                                                  -----------------------      Earnings
                                                                   Shares        Amount        (Deficit)        Total
                                                                   ------        ------        ---------        -----
                                                       
<S>                                                             <C>          <C>            <C>              <C>     
BALANCE, December 31, 1996                                          15,000       $216           $(611)           $(395)  
    Net income                                                        -           -               277              277 
    Distributions                                                     -           -              (300)            (300)
                                                                  --------       ----           ------           ----- 
                                                                                                                       
BALANCE, December 31, 1997                                          15,000        216            (634)            (418)
    Net income                                                        -           -               751              751 
    Distributions                                                     -           -              (224)            (224)
                                                                  --------       ----           ------           ----  
BALANCE, May 26, 1998                                               15,000       $216           $(107)           $ 109 
                                                                    ======        ===            ====             ==== 
</TABLE>
                                                                              


    The accompanying notes are an integral part of these financial statement.


<PAGE>


                      TELLURIDE RESORT ACCOMMODATIONS, INC.

                            STATEMENTS OF CASH FLOWS
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                                       January 1 
                                                                                    Year Ended          through
                                                                                   December 31,         May 26,
                                                                                      1997               1998
                                                                                  ------------      -------------
<S>                                                                                   <C>                 <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                                        $  277          $    751
    Adjustments to reconcile net income to net cash provided
       by operating activities-
          Depreciation                                                                    48                20
    Changes in operating assets and liabilities-
       Accounts receivable                                                                35               (83)
       Prepaid expenses and other current assets                                          15               (22)
       Payable to property owners, net                                                    19              (488)
       Customer deposits and deferred revenue                                             28            (1,596)
       Accounts payable and accrued liabilities                                          299                88
                                                                                     -------           -------
              Net cash provided by (used in) operating activities                        721            (1,330)
                                                                                     -------           -------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of property and equipment                                                   (25)              (67)
                                                                                     -------           -------
              Net cash used in investing activities                                      (25)              (67)

 CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from (payments on) line of credit                                            93              (194)
    Proceeds from note payable                                                          -                   54
    Payments on note payable                                                            -                   (6)
    Distributions to stockholders                                                       (300)             (202)
                                                                                     -------           -------
              Net cash used in financing activities                                     (207)             (348)
                                                                                     -------           -------

NET INCREASE (DECREASE) IN CASH AND CASH
    EQUIVALENTS                                                                          489            (1,745)

CASH AND CASH EQUIVALENTS, beginning of period                                         1,614             2,103
                                                                                     -------           -------
CASH AND CASH EQUIVALENTS, end of period                                             $ 2,103          $    358
                                                                                      ======           =======

SUPPLEMENTAL DISCLOSURE OF NON-CASH
    FINANCING ACTIVITIES:
       Accrued distribution to stockholders                                          $  -             $     22
                                                                                      ======           =======
</TABLE>



   The accompanying notes are an integral part of these financial statements.


<PAGE>


                      TELLURIDE RESORT ACCOMMODATIONS, INC.

                          NOTES TO FINANCIAL STATEMENTS

1.     BUSINESS AND ORGANIZATION:

Telluride Resort Accommodations,  Inc. (the "Company"),  a Colorado corporation,
provides  property  rentals and management  services in Telluride,  Colorado and
manages   approximately  450  total  rental  units.  The  Company  provides  its
management services to property owners pursuant to management  contracts,  which
are  generally  one year in  length.  The  majority  of such  contracts  contain
automatic  renewal  provisions but also allow  property  owners to terminate the
contract at any time. The Company's operations are seasonal,  with a peak during
the first quarter of the year.

On May 26, 1998, ResortQuest International, Inc. ("ResortQuest") consummated its
initial public offering and acquired all of the outstanding stock of the Company
in exchange for cash and shares of ResortQuest common stock (the "Combination").
Certain  stockholders  retained  non-operating  assets  and  assumed  or retired
certain  liabilities  that were excluded from the  Combination  and the purchase
price for the Company was adjusted for certain  working  capital  adjustments of
approximately $22,000.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

       Revenue Recognition

The Company  records  property  rental fees on the accrual basis of  accounting,
ratably  over the term of guest  stays,  as earned.  During  peak  periods,  the
Company  requires a deposit equal to 100% of the rental fee 45 days prior to the
expected  arrival date.  These deposits are  non-refundable  and are recorded as
customer deposits and deferred revenue in the accompanying  financial statements
until the guest stay commences. The Company records revenue for cancellations as
they occur.

Service fees are recorded  for a variety of services and are  recognized  as the
service is provided,  including  spring and fall cleaning,  unit maintenance and
housekeeping.

       Operating Expenses

Operating  expenses  include travel agent  commissions,  salaries,  maintenance,
housekeeping,  communications,  advertising,  credit  card fees and other  costs
associated with management of the properties.

       Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the Company
considers all investments with original maturities of three months or less to be
cash equivalents.


<PAGE>


       Property and Equipment

Property and equipment are stated at cost,  and  depreciation  is computed using
the straight-line method over the estimated useful life of the assets.

Expenditures  for repairs and  maintenance are charged to expense when incurred.
Expenditures for major renewals and  betterments,  which extend the useful lives
of existing  equipment,  are  capitalized  and  depreciated.  Upon retirement or
disposition  of  property  and  equipment,  the  cost  and  related  accumulated
depreciation  are removed from the accounts  and any  resulting  gain or loss is
recognized in the statement of operations.

       Income Taxes

The Company has elected S Corporation  status as defined by the Internal Revenue
Code and state tax statutes,  whereby the Company is not subject to taxation for
federal or state tax purposes.  Under S  Corporation  status,  the  stockholders
report their share of the Company's taxable earnings or losses in their personal
tax returns.

       Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting   principles  requires  the  use  of  estimates  and  assumptions  by
management in determining  the reported  amounts of assets and  liabilities  and
disclosures  of contingent  assets and  liabilities at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

       Concentration of Risk

The Company's operations are exclusively in the Telluride, Colorado area and are
subject to significant changes due to weather conditions.

3.     PROPERTY PLANT AND EQUIPMENT:

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
<S>                                                   <C>                                <C>                 <C>

                                                       Estimated Useful Lives          December 31,          May 26,
                                                              In Years                     1997               1998
                                                       ----------------------          ------------        -----------

    Furniture, fixtures and equipment                            5                        $ 580               $ 581
       Leasehold improvement                                     5                           79                 131
       Vehicles and other                                        5                           65                  79
                                                                                          -----                ----
                                                                                            724                 791
       Less - Accumulated depreciation                                                     (662)               (682)
                                                                                          -----                ----
       Property and equipment, net                                                        $  62               $ 109
                                                                                          =====                ====


</TABLE>

                                      -2-



<PAGE>


4.   DEBT:

The Company has a note payable to a bank with interest at 9% per annum,  through
June 30, 2001. The note is secured by vehicles of the Company. Maturities of the
note are as follows:

         Year Ended December 31,
                1998                     $  8,000
                1999                       15,000
                2000                       16,000
                2001                        9,000
                                         --------
                                           48,000
                Less current maturities    14,000
                                         --------
                                          $34,000
                                         ========

5.     LINES OF CREDIT:

The Company has lines of credit  with a bank.  The first line of credit  matures
June 1998 and  provides a  revolving  line of credit up to  $200,000  to finance
working  capital  needs.  At December 31, 1997 and May 26, 1998, the Company had
$194,000 and $0, respectively,  outstanding on this line of credit.  Interest is
payable  monthly  at 1.75%  over the Wall  Street  Journal  Base  Rate  (8.5% at
December 31, 1997). The second line of credit in the amount of $90,000,  matures
August 31, 1998, and can be drawn upon only in the event that certain guaranteed
load factors aboard  aircraft into the Telluride  area are not met.  Interest is
payable  monthly  at 2.00%  over the Wall  Street  Journal  Base  Rate  (8.5% at
December 31, 1997).  There was no outstanding  balance on this line of credit at
December 31, 1997 and May 26, 1998.

6.     COMMITMENTS AND CONTINGENCIES:

       Litigation

The Company is involved in various legal actions  arising in the ordinary course
of business.  Management does not believe that the outcome of such legal actions
will have a material  adverse  effect on the  Company's  financial  position  or
results of operations.

       Insurance

The Company carries a broad range of insurance  coverage,  including general and
business  auto  liability,  commercial  property,  workers'  compensation  and a
general  umbrella  policy.  The Company has not incurred  significant  claims or
losses on any of its  insurance  policies  during the periods  presented  in the
accompanying financial statement.

                                      -3-
<PAGE>


       Benefit Plans

The Company's 401(k)  retirement plan is available to  substantially  all of the
Company's  employees.   The  Plan  allows  the  Company  to  make  discretionary
contributions to the Plan. The Company has made no such contribution to the Plan
for the year ended  December  31,  1997 or for the period  from  January 1, 1998
through May 26, 1998.

7.     RELATED PARTIES:

The Company paid certain  stockholders $32,000 and $0 in consulting fees for the
year ended  December  31, 1997 and for the period from January 1 through May 26,
1998,   respectively.   In  addition,  the  Company  rented  office  space  from
stockholders  of  approximately  $36,000 and $20,000 for the year ended December
31, 1997 and for the period from January 1 through May 26, 1998, respectively.


                                      -4-