10-Providing Advice - 13 mar t ede y recently graduated from the Atlan Vet Charlottetown, PEI called and urbest Du s her practice has been extremely busy. She is t or tomorrow to discuss whether she is ready to expand c words and prepared her financial statements below the w e rs h h e e o o d est Income Statement of Island Fur B September 10, 2013 Sales revenue Cash $42.000 18.000 Owner's initial investment Total revenue $110.000 Medical supplies expense 3,000 Dividend to Stacey 5.000 Receptionist wages 15.000 Advertising expense 1.500 Utilities expense 1.800 Total expenses $26.300 Net Income $83.700 Balance Sheet of Island Fur Babies Ltd. September 30, 2019 $19,900 12.000 $31.900 Liabilities: Accounts payable Rent expense Total liabilities Assets: Equipment Accounts receivable Medical supplies inventory Total assets Equity: Owners' Equity $30,000 25,000 600 $45,600 $13,700 When you review the financial statements that Stacey has prepared, you realize they contain many errors. All of the dollar amounts contained in Stacey's financial statements are correct except for Owners' Equity. Stacey recorded Owners' Equity at $13,700 to force her balance sheet to 'balance', so you realize you cannot rely on this number. You feel that Stacey should consider expanding only if a) net income for the first six months exceeds $20,000 and b) current assets exceed $45,000. Required: Prepare a corrected income statement and classified balance sheet. After preparing the statements, give Stacey your recommendation as to whether she should expand her veterinary business