Janet Jones is a professional gym instructor. She started her own business, Janets Gym, a proprietorship, in 2014. Consider the following facts, as of December 31, 2018:

Janets Gym owned a small gym, which it acquired for $600,000 in 2018; the land was worth $500,000, and the building was worth $100,000. The business took out a $520,000 mortgage, and Janet Jones contributed the remaining $80,000 cash to buy the property.

In 2018, Janets Gym spent $15,000 to acquire a gym franchise, Gym to Go.

Janet Jones had $15,000 in the business bank account and $7,000 in her personal bank account.

Janet Jones owed $1,900 on her personal MasterCard.

Janets Gym acquired $10,000 in gym equipment on December 15, 2018; Janets Gym put a down payment of $2,000 and was going to pay the remaining balance in January, 2019.

Janets Gym had $400 in office supplies on hand at December 31, 2018.

Janet Jones bought a condo in 2016 for $400,000. At December 31, 2018, her mortgage on the condo was $300,000.

Required:

Janets Gym was researching liability exposure. What advice can you provide to Janets Gym?