re: Solve this problem: how much did the owner lose?

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Uh no.

You can’t ignore sunk costs on financial reports

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$70 cash lost, $70 product lost, $130 total value lost.

Let's say you had exactly $130 in the register. You end with $70, right? It's 130-100+70-30 = 70, so you're down $60 net, right?

You started with a store full of products worth whatever and ended with $70 less in products, $70 lost.

So $130 total?

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The loss will be written off to inventory when the actual inventory doesn't reconcile with recorded amount.

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The only thing I lost was the $5 cost of the stolen widget. How did I lose out on profit if I was able to easily replace it and fulfill the order? I still made the profit from the replacement widget and if you look at my books I only lost my $5 cost.

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Answer To Stolen Money Riddle
The best answer from the choices is the owner lost $100. The $100 bill that was stolen was then given back to the owner. What the owner loses is the $70 worth of goods and the $30 in change, which makes for a total of $70 + $30 = $100. The owner has lost $100.

Technically, the owner lost $30 plus the value, V, of the $70 of goods. Since stores typically sell goods at a markup, the value may be less than $70. But in the case of a loss leader, the owner may have lost more than $70.

Another strategy to solve the problem is to break it down into two stores.

Story A
A guy walks into a store and steals a $100 bill from the register without the owner’s knowledge.

How much money did the owner lose? Clearly the answer is $100. The owner is a net -100.

Story B
He buys $70 worth of goods using a $100 bill and the owner gives $30 in change.

How much money did the owner lose? The owner did not lose any money, this is a routine transaction! If the goods are valued at V, the owner is a net +100 – V – 30 = 70 – V.

The story in the riddle is the sum of the two stories. This means the owner’s position is the sum of the position in those two stories. The owner is a net -100 + (70 – V) = -30 – V. That is, the owner lost $30 plus the value of the goods. If the goods are valued at $70, then the owner lost $100.




Misconceptions

Many people think the answer is 200 dollars. It seems like the owner had $100 stolen, and then had another $100 stolen in the second story. But remember the thief also paid using the $100 bill, so the owner actually gets back $100. The owner’s loss is $100.

Some people think $130 because the owner lost a $100 bill and then gave $30 in change. But remember the owner also received a $100 bill, and also gave away $70 in goods. Adding up all the transactions leads to the owner losing $100.

The other incorrect responses are misunderstandings of a similar sort where people are not sure which numbers to add or subtract, or they are not taking into account all parts of the story.

It may help to view the two parts as separate stories and then add them up. The fact the thief paid with the stolen $100 bill seems to be another source of confusion. It does not matter the $100 was stolen; it only matters that the bill was genuine currency.

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