Tractor Co. signed a contract to sell a tractor to Green Inc. for $55,000. Green paid for the tractor, and asked Tractor to delay delivery. Identify situation that Tractor can recognize sales revenue before delivery of the tractor to Green?

1. Tractor has five identical tractors in stock, and did not physically set aside a tractor for Green. Instead, it tells its warehouse manager that one tractor must remain in stock for delivery to Green upon demand.
2. Tractor moved a tractor to another warehouse and labeled it SOLD TO GREEN CO. It informed the warehouse manager that he must be ready to ship the tractor to Green, and prohibited him from selling the tractor to another customer or from moving the tractor out of the warehouse.
3. Tractor moved a tractor to another warehouse and labeled it SOLD TO GREEN CO. It informed its warehouse manager that, he may sell the tractor only if the manager can replace Greens tractor within 24 hours.

Situation 2

Situation 1

Situation 3

Situations 2 & 3