A woman buys a $ 78 necklace at a jewelry store. She gives the jeweler a check for $ 100. Because he does not have the $ 22 change, he goes to another merchant next door. There he exchanges the woman's check for $ 100 in cash. He returns and Gives the woman the necklace and her Change. Later the Check is returned by the Bank as unpayable and he must repay the Other Merchant. He originally paid $ 39 for the necklace. What is his total out-of-pocket Loss?
78-100-22-39 = -83
To determine the jeweler's total out-of-pocket loss, we need to break down the transactions step by step.
1. The woman buys a $78 necklace and gives the jeweler a $100 check.
2. The jeweler needs to return $22 in change to the woman because he doesn't have it on hand.
3. To get the change, the jeweler goes to another merchant and exchanges the woman's $100 check for $100 in cash.
4. The jeweler returns to the woman and gives her the necklace and the $22 change.
5. Later, the bank informs the jeweler that the woman's check is unpayable, meaning the jeweler must repay the other merchant the $100 in cash that he received in exchange for the check.
6. The jeweler originally paid $39 for the necklace.
To calculate the jeweler's total out-of-pocket loss, we need to find the difference between the amount he spent (the cost of the necklace) and the amount he needs to repay the other merchant (the cash received in exchange for the check).
Total out-of-pocket loss = Amount spent - Amount to be repaid
Amount spent = $39
Amount to be repaid = $100
Total out-of-pocket loss = $39 - $100
Total out-of-pocket loss = -$61
Therefore, the jeweler's total out-of-pocket loss is -$61, indicating a loss of $61.