There is no difficulty in transferring to the special ledger shown in Form 11 (Section 20) or Form 15 (Section 23) a set of accounts which have been kept in ordinary ledger form, the procedure being as follows:

A trial balance showing the balances of contracts outstanding is taken off the old sub-ledger, and the following fraction is worked out:

Balance of Gain account X 100


Number of cents in each dollar uncollected, which is unearned profits

Balance due on contracts

Each of the debit balances on the trial balance is then multiplied by this number of cents by means of a calculating machine, and the amount of the profit is set against the balance of the contract. The total of these being added, the footings prove themselves, for the total balances multiplied by the number of cents of unearned profits should equal the total gain. In such cases a small amount is usually left over, as it seldom happens that the fraction yields a whole number; and this sum is carried in the balancing account and should be written off in the manner suggested above.

It will be seen that the extra labor of keeping the ledger shown in Form 15 is slight, and is more than offset by the accurate results obtained. Form 15 is especially designed for those cases where no interest, taxes, or other charges are made against the account - in other words, where each payment applies directly and entirely to a reduction of the principal; while Form 11 is applicable to mortgages or contracts where there are interest and other charges and it offers equal advantages. The method of using the ledger shown in Form 11 differs from that required in connection with Form 15, inasmuch as in the former the "Reserve" columns are affected only when a payment reduces the balance to an amount smaller than it was when the last previous entry was made in the "Reserve" columns. In other words, if a purchaser makes payments covering interest, or any other charge, such payments do not affect the reserve.

The ledgers shown in Forms 11 and 15 have been in use for a number of years and the results obtained from them are entirely satisfactory. They not only greatly reduce the work of an auditor, but they do away with all the uncertainties; giving positive, reliable figures instead of the approximations obtained by the methods described in Section 168 et seq.