Barbara Boland opened a flower shop. Business has been good, and Boland is considering expanding with a second shop. A cousin has produced the following financial statements at December 31, 2014, the end of the first three months of operations:

In these financial statements, all amounts are correct except for Owners' Equity. Boland's cousin heard that total assets should equal total liabilities plus owners' equity, so he plugged in the amount of owners' equity at $43,000 to make the balance sheet come out evenly.
Requirements
Barbara Boland has asked whether she should expand the business. Her banker says Boland may be wise to expand if (a) net income for the first quarter reaches $5,000 and (b) total assets are at least $25,000. It appears that the business has reached these milestones, but Boland doubts her cousin's understanding of accounting. Boland needs your help in making this decision. Prepare a corrected income statement and balance sheet. (Remember that Retained Earnings, which was omitted from the balance sheet, should equal net income for the period; there were no dividends.) After preparing the statements, give Boland your recommendation as to whether she should expand the flower shop.

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Barbara Boland Blossoms Inc. Income Statement Quarter Ended December 31, 2014 Barbara Boland Blossoms Inc. Balance Sheet As at December 31, 2014 Sales revenue Share capital $36,000 Assets Total revenue Accounts payable Advertising expense Rent expense 10,000 46,000 8,000 5,000 6,000 Cash Cost of goods sold (expense) Flower invento Store fixtures 6,000 22,000 5,000 10,000 $43,000 ry Total assets Total expenses Net income 19,000 Liabilities None $27,000 Owners' Equity $43,000