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by brass9
4814 days ago
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$17,000 figure is correct: 1) Store buys TV (COGS = $7K): -$7K 2) Sold TV for $10K. Realized P/L: $3K 3) $10K refunded (chargeback): -$7K 4) TV is gone as well. Inventory: -$7K 5) Potential profit loss: -$3K Total loss: (7+7+3) = $17K |
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2. Store sells TV. +$10000, subtotal: +$3000
3. Store pays chargeback. -$10000' subtotal: -$7000
You can't double count the TV, and IMO, you can't count the potential profit loss either, as that's covered once the store buys a replacement TV for inventory. There are fees on top of the above, but the store is out the COGS and fees, not double the COGS, plus the margin.