User Support Forum

I took the advice of a forum member and set up a set powerchurch so I could see the default chart of accounts and also to help me understand how the different accounts correlate.
Well, I have done that and it is helping, but I am baffled by the balance sheet already and all I have entered is my basic info (acct balances, etc) that the wizard asked for. Here's my question:
Is there someone who could explain this sample balance sheet to me? I am attaching it to this email.
I understand that my bank account balances = 160,000 and I have 100 in petty cash....And I have $51,000 in temp. restricted, but I don't know why under net unrestricted assets the total is 169,100.?
Where does the $9000 come from??

Well, I'm not able to upload the file, I'm not sure what type of file we can upload here. So here's the balance sheet and I apologize if this takes up too much space:

ASSETS
BANK ACCOUNTS
CHECKING ACCOUNTS
PNC Main Ckg $100,000.00
PNC Other Fund 10,000.00
Subtotal Checking Accounts 110,000.00
SAVINGS ACCOUNTS
PNC Savings Acct 50,000.00
Subtotal Bank Accounts 160,000.00
CASH ON HAND
Petty Cash 100.00

FIXED ASSETS
LAND
Land One 1,000,000.00
Land Two 100,000.00
Subtotal Land 1,100,000.00
BUILDINGS
Building 200,000.00
EQUIPMENT
Office Equipment 10,000.00
Subtotal Fixed Assets 1,310,000.00
TOTAL ASSETS $1,470,100.00

LIABILITIES
CURRENT LIABILITIES
PASS THRU CONTRIBUTIONS
RHP $30,000.00
MNA 20,000.00
Subtotal Pass Thru Contributions 50,000.00
Subtotal Current Liabilities 50,000.00
LONG-TERM LIABILITIES
MORTGAGES & LOANS
Mortgage 1,200,000.00
TOTAL LIABILITIES 1,250,000.00

NET ASSETS
UNRESTRICTED
Unrestricted Net Assets $169,100.00
DONOR RESTRICTED
TEMPORARILY RESTRICTED
Building Fund 50,000.00
Kitchen Equipment 1,000.00
Subtotal Temporarily Restricted 51,000.00
Subtotal Donor Restricted 51,000.00
TOTAL EQUITY 220,100.00

TOTAL LIABILITIES AND EQUITY $1,470,100.00

There are three sheets that work together to give you the total financial picture of a church. Most of us work with two of them. The Balance Sheet, and the Income and Expense Statement (the other one is a Cash Flow statement).

The $51,000 comes from the Income and Expense statement which you did not post here. It shows how much of the $220,100 is restricted income and how much is unrestricted income. These income accounts "close-to" an equity account, which is what you have here.

If you look at the Income and Expense report, you will see the $51,000 and the $169,100 on the Income (or top) part of the report.

When I run the Inc/Exp report it only shows a zero balance. I have not entered any income or expense, I just used the accounting set-up wizard to get started. I entered ckg and sav account balances and I entered 2 pass-through accounts and two temp restricted accounts (using the wizard).

I'm sorry. I misunderstood. So, you input these as beginning balances.

That means that somewhere, in the past, $51,000 came in as restricted income and $169,100 came in as unrestricted income. You do not have to input past income and expenses. Just the balances like what you already did.

Okay, but my question is: I only have $160,000 in my bank accounts....and $100 in petty cash so where does the total figure of $220,100 come from? I would think that if I had $51,000 in restricted funds, then my unrestricted figure should be:$109,100. ??

That is the total of all equity accounts.

Unrestricted Net Assets $169,100.00
Building Fund 50,000.00
Kitchen Equipment 1,000.00

Which is calculated by taking:

TOTAL ASSETS $1,470,100.00
TOTAL LIABILITIES 1,250,000.00

and subtracting the two. Equity here works like equity in your house, where the total assets would be the value of the house and the total liabilities is how much you owe on your mortgage. The difference between the two is equity.

Okay, I think I understand. I definitely need some more accounting training!