A tourist goes to shop and finds an article interesting. The shopkeeper tells the tourist that the article costs Rs. 850. The tourist agrees to buy the article but tells the shopkeeper that he can only pay through travelers’ cheques. The shopkeeper does not want to lose the business. He request his cousin who has a shop next door to help in encashing the travelers’ cheques. After his cousin agrees, the shopkeeper prepares a bill. The tourist has travelers’ cheques in the denominations of Rs. 500. He gives 2 cheques of Rs. 500 each. The shopkeeper exchanges these cheques with his cousin and gets cash. He gives the article and the balance money of Rs. 150 to the tourist. The tourist happily goes away.
Next day the shopkeeper’s cousin goes to the bank with the travelers’ cheques. The bank people refuse to honour the cheques and tell him that these are counterfeit ones. The cousin gets annoyed and shouts at the shopkeeper. The shopkeeper has no option but to give away the Rs. 1000 to him in cash. Calculate the total loss incurred by the shopkeeper in this deal.