Mr. Tory, the manager of a local finance company, was walking down his street when he found a $100 bill by the curb. He picked it up, noted the serial number, and went home. Mrs. Tory told her husband that they owed the liquor store $100, so he gave the bill to his wife to pay the liquor store. The owner of the liquor store owed the butcher $100, so he gave the bill to the butcher, who then went to a farmer, and purchased a lamb with the $100. The farmer remembered he owed the finance company $100, so he took the same bill to them to pay his debt. Upon careful examination, Mr. Tory discovered that the bill was counterfeit. By this time, the $100 bill had paid $400 in debt. Which transactions turn sour and who loses what?
AnswerSince the identical counterfeit bill can be traced through all the transactions, they are all invalid. Therefore, everybody stands in relation to their respective debts as they were before Mr. Tory found the counterfeit bill. This being the case, the farmer is entitled to his lamb or $100.
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