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Trish22 · Dec 19, 2006, 12:08 PM

Hello, I'm a treasurer for a club at the local college. I'm just finishing up my year so I can return the books to the advisor and I just have one problem.

My Cash in Bank Doesn't equal my capital. Any Suggestions?
Balance Sheet
Assets
Cash in Bank $3840.77
Total Assets $3840.77

Equity
PTKLCC, Capital $1113.08
Total Equity $1113.08

Income Statement
Income
Membership Fees Received $3990.00
Bank Interest Earned $0.65
Fundraising Income $1338.35
Other Income $701.09
Total Income $6030.09

Expenses
Membership Fees Expense $4917.01
Promo Expense $0.00
Supplies Expense $0.00
Total Expenses $4917.01
Net Income $1113.08

I don't know where I went wrong. Thanks for the help
Trish

CaptainForest · Dec 19, 2006, 01:23 PM

The reason you are having difficulties is that you are using the wrong formulas.

Assets = Liabilities + Equity

That is the same thing as sating Assets – Liabilities = Equity

So if the only asset you have is the cash in the bank of $3,840.77 and you have NO liabilities, then your equity would be:

3,840.77 – 0 = $3,840.77 in Equity

Equity is a running total. It is made up of previous year's equity PLUS this years net income.

Trish22 · Dec 19, 2006, 03:07 PM

I took the totals of equity and assets from the ledger, so is there somewhere I went wrong?

CaptainForest · Dec 19, 2006, 04:01 PM

Yes.

You need to verify your accounts.

If you have $3,840.77in cash that ALL belongs to the organization and $0 in liabilities, your equity is $3840.77

How was the Equity calculated in the ledger? Check to make sure those numbers were right.

Also veryify that the entire cash amount is your cash.

Rahulrd · Jan 4, 2007, 02:55 PM

well I thnk either u hve misscalculated your equity or u hve not excluded some bills payable. Make sure u don't hve any Liabilities.

A=L+E

sajalarora · Jan 10, 2007, 03:50 AM

For calulating the capital at the last day of the accounts closed is:

Opening capital
+ capital introduced during the year
- drawings made during the year
+ profit / net income of the year
-------------------------------------
Closing capital
---------------------------------

So I think the difference is on account of opening capital.