I wasn't a math major in college, but would like to think I have a sense of logic, so here goes:
I buy golf balls at $250 wholesale price. These balls end up essentially being "donated" to the customer.
Running total: $250
Customer buys balls for $320 retail, and requires $180 in change. I change out his $500 with my neighbor for smaller bills. I pay $180 of the neighbor's money to the customer, who walks out with my golf balls. This $180 is NOT coming out of MY pocket.
Running total: $250
Turns out the $500 bill is bogus. The $500 I received from the neighbor is, in effect, a $500 loan. I gave $180 of that $500 to the customer in change, leaving me $320 of the neighbor's money I can give back to the neighbor. But I also have to dip into my own funds -- to the tune of $180 -- to pay back the neighbor his full $500.
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