Sparrow Ltd (Sparrow) enters into a contract with a customer…
Sparrow Ltd (Sparrow) enters into a contract with a customer to deliver a phone package to the customer in return for an upfront payment of $3,000. Under the terms of the contract the customer will receive a ‘free’ phone upon signing the contract, and phone service for two years. Sparrow also sells phones and phone services separately. Which of the following statements is correct?