We need a bit more information to understand your setup.
What version of AirPort Utility are you using? If you are not sure, open AirPort Utility and click on the AirPort Utility menu at the upper left corner of the screen. Then click on About AirPort Utility. Post back with the version number that you see there.
The Time Capsule cannot "extend" a wireless network unless it is connecting to another Apple router....an AirPort Extreme, AirPort Express, or another Time Capsule.