was always subject to an acknowledged obligation to credit it to the distributors when collected. As was said in American National Co. v. United States, 274 U.S. 99, 47 S.Ct. 520, 522, 71 L.Ed. 946: "The Company's net income for the year could not have been rightly determined without deducting from the gross income represented by the commission notes, the obligations which it incurred under the bonus contracts, and would not have been accurately shown by keeping its books or making its return on the basis of actual receipts and disbursements. The method which it adopted clearly reflected the true income. And, just as the aggregate amount of the commission note was properly included in its gross income for the year  although not due and payable untilwere included in the obligations of the distributor. While the repurchase price was without regard to existing value, the method of fixing it had the merit of simplicity and uniformity in winding up a distributorship, and there was provision that upon resale a reappraisal was to be made. We see no sound ground for striking down the provisions of the contracts because of bad faith in their execution. A refund should have been allowed, measured by the reserve for depreciation of furniture and fixtures sold to the distributors.
Reversed and remanded for further proceedings in conformity herewith.
McALLISTER, Circuit Judge (dissenting in part).
The items representing 10% of purchaser's conditional sales contracts, which were carried by the taxpayer in its accounts receivable, constituted income. But a charge of the same amount