Problem
Case: Ultima Company offers customers discounts to purchase goods and title before they actually need them. The company offers to hold merchandise for customers until they request delivery. This prevents customers from making space in their warehouses for merchandise they don't need yet. The merchandise is available and ready to be delivered to the buyer at the time of sale. Ultima Company pays the cost of storage and insurance prior to shipment. Customers are billed at the time of sale and given the normal credit period (90 days) to pay.
Task
Determine whether Ultima Company should recognize revenue from the sale of goods at the time title passes to the customer or defer revenue recognition until the goods are delivered to the customer.