What actions can she take against me, if I didn’t give back the dog?

I bought one dog for $125 and paid cash. The lady was so desperate to get rid of her dogs she gave me another for free with the condition that I would give it back to her if she wanted it. The next day she called wanting to get the free dog back. I gave it back and did not charge her for the shots or wormer that I had given it. Then she called the next day wanting to give me another dog. On the next day she tells me that she wanted to keep that dog and called me back a few minutes later saying she wanted the dog I paid $125 for back. This time she claimed she was talking about both dogs when she was talking about getting the dog back. But that is not how my son (12) or I remember the conversation. I explained that my understanding was that I was going to keep the dog I paid for regardless and only give the one back that she gave me for free if she wanted it. I told her my son was attached and didn't want to give it back. She now says she will pay me the $125 plus what I paid in shots and wormer for both the dogs. She then tells me my son will get over it and she is bi-polar and on disability so she should be able to get the dog back. How do I handle this situation?