A customer enters a store & purchases slippers for $5, paying for the purchase with $20 bill. The merchant, unable to make change, ask the grocer next door to change the bill. The merchant then gives the customer the slippers & $15 change. After the customer, leaves the grocer discovers that the $20 bill is counterfeit & demands that the shoe store owner make good on it. The shoe store owner does so, & by law is obligated to turn the counterfeit bill over to the FBI. How much does the shoe store owner lose in this transaction?
I think he lost $20 + the cost of the slippers. Or is this a trick question?
Suppose the merchant has only a $20 bill in his till. The customer comes in with the (counterfeit) $20, goes next door to the grocer and then gets, let's say, four $5 bills. He comes back and gives the customer three of those for his $15 change and then puts the fourth $5 bill in his till. This means, right now he is up $5 for $25 in his till. Later, the grocer next door comes in with the counterfeit bill and the merchant must give him $20, leaving $5 in his till. Considering he SHOULD have $25 in the cash register, I agree that he is out $20 [plus the cost of buying the slippers].
To calculate how much the shoe store owner loses in this transaction, we need to break it down step-by-step:
1. The customer purchases slippers for $5 and pays with a $20 bill.
2. The merchant, unable to make change, asks the grocer next door to change the bill.
3. The grocer gives the merchant $20 in real currency in exchange for the counterfeit $20 bill.
4. The merchant gives the customer the slippers and $15 in change, consisting of one $10 bill and one $5 bill.
5. After the customer leaves, the grocer discovers that the $20 bill is counterfeit.
6. The grocer demands that the shoe store owner make good on it.
7. The shoe store owner is legally obligated to turn the counterfeit bill over to the FBI.
To calculate the shoe store owner's loss, we need to determine the difference between the value of the counterfeit bill and the real currency given to the customer:
Value of counterfeit bill = $20
Value of real currency given to the customer = $15 ($10 + $5)
Shoe store owner's loss = Value of counterfeit bill - Value of real currency given to the customer
= $20 - $15
= $5
Therefore, the shoe store owner loses $5 in this transaction.
To find out how much the shoe store owner loses in this transaction, we need to break down the different parts of the transaction and determine the overall loss.
1. The customer purchases slippers for $5 and pays with a $20 bill.
2. The merchant, unable to make change, asks the grocer next door to change the bill.
3. The merchant gives the customer the slippers and $15 change.
4. Later, the grocer discovers that the $20 bill is counterfeit and demands reimbursement from the shoe store owner.
5. The shoe store owner makes good on the counterfeit bill and turns it over to the FBI.
Let's consider the loss incurred by the shoe store owner at each step:
Step 1: The customer pays $5 for the slippers. At this point, the shoe store owner does not experience any financial loss.
Step 2: The merchant asks the grocer to change the $20 bill. At this point, the shoe store owner has not suffered any loss.
Step 3: The merchant gives the customer $15 change. Since the customer paid with a $20 bill, the merchant has given away $15 of the counterfeit money as change. The shoe store owner incurs a $15 loss here.
Step 4: The grocer discovers the counterfeit bill and demands reimbursement from the shoe store owner. The shoe store owner has to make good on the counterfeit bill, which means they need to pay back the grocer for the value of the counterfeit bill. Since the shoe store owner already lost $15 in change, they now have an additional loss equal to the value of the counterfeit bill.
Step 5: The shoe store owner turns the counterfeit bill over to the FBI. While this step doesn't directly result in a financial loss, the shoe store owner cannot use or redeem the counterfeit bill.
Overall, the shoe store owner loses the value of the counterfeit bill, in addition to the $15 given as change to the customer.