Tom's Solution (Puzzle)

Tom had two pound coins, Tim had 1 pound coin, Tam had 50 p and Ted had nothing.

Tom, because he was a generous friend, wanted to give some money to each of his three friends but he only had two pound coins and there were three of them.

(Also Tom wasn't able to break down his two pounds into change).

So how could he give them each some money?

Answer:

First, he gave his two pounds to Tim then Tim gave his 1 pound to Tam, then Tam gave his 50p to Ted. Now all of his three friends had more money than they did before.