The amount paid on any one series of outstanding contracts may not be readily ascertained from the balance of the general ledger account, which includes cancellations as well as payments upon contracts which have been fully paid up and closed.

In order to obtain this necessary figure, a list of the balances in the sub-ledger is taken off on an adding machine. To facilitate checking, it is convenient to use blank paper of journal size instead of the usual strips, showing a total at the end of each letter (i.e., each alphabetical division) and putting only two columns on a page; the totals under the various letters being then listed in order to obtain the grand total.

After this has been done, the list is put through the adding machine again, and the original amounts of these same contracts are added in a similar manner. The lists are then checked back, and at the same time there is inserted the number of lots covered by each contract, and, when the checking is completed, the total of these is obtained. The following example will show more clearly the appearance of such sheets:

Original Price

No. of Lots

Balance Feb. 28, 1917

A

$150.00

1

$125.00

250.00

2

232.50

$400.00

3

$357.50

B

$300.00

2

$275.00

300.00

2

270.00

300.00

2

270.00

500.00

4

340.oo

$1,400.00

10

$1,155.00

C

$300.00

2

$260.00

150.00

1

125.00

125.00

1

120.00

$575.00

4

$505.00

We have now all the information necessary to solve the equation in Section 169, viz:

1. Payments made are found by subtracting the balance of open contracts from the original amount of those contracts.

2. The original amount of the contracts is taken from the machine list.

3. The number of lots also is taken from the machine list.

4. The average profit is found by subtracting the cost price (which is an established figure) from the average selling price, obtained by dividing the amount of the original sales by the number of lots in those sales.