Lawes Company, a cash basis business, mailed a $24,500 invoice to MWQ Partnership for professional services rendered. MWQ offered to pay the invoice by transferring 250 shares of ConAgri common stock to Lawes. The shares are selling on the NYSE at $98 per share. If Lawes accepts the shares in payment, it recognizes:

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Since Lawes Company is a cash basis business, it recognizes income when it is received, regardless of the form in which it is received. Accepting 250 shares of ConAgri common stock valued at $98 per share results in receiving $24,500 (250 shares * $98 per share), which is equivalent to the invoice amount. Therefore, Lawes recognizes $24,500 as taxable income upon receipt of the shares.

Lawes Company, a Cash Basis Business, Mailed a $24,500 Invoice