Sahara Company's Cash account shows an ending balance of $850. The bank statement shows a $28 service charge and an NSF check for $100. A $240 deposit is in transit, and outstanding checks total $340. What is Sahara 's adjusted cash balance?

The adjusted cash balance amounts to $722

Explanation:

The adjusted cash balance is computed as:

Adjusted cash balance = Ending balance of cash account - Service Charge - NSF check

where

Ending balance of cash account amounts to $850

Service Charge amounts to $28

NSF check amounts to $100

Putting the values above:

Adjusted cash balance = $850 - $28 - $100

= $750 - $28

= $722

Note: Outstanding check and deposit in transit will be considered in cash balance.