In every business where payments are made on an instal ment plan, it is inevitable that there should be a certain number of lapses; and the real estate business is no exception to this rule. If such a business is properly conducted and the accounts carefully watched, these lapses should result in profits to the concern, although these profits will evidently be less than if the sales had been completed. Indirect or subsequent profits arising out of the resale of the property involved are, of course, treated as new business. In other words, each cancellation profit leads to an immediate reduction of the "Gain on Sales" (the reserve profits), and to an immediate but smaller addition to the earned profits.