Gary, James, and John operate an accounting firm. In March, their staff worked a total of 1,150 hours at an average billing rate of $250 per hour. They sent bills to clients in the month of March that totalled $172,500. They expect to bill the balance of their time in April. The firm's salary costs total $86,250 each month.
How much revenue should the firm recognize in the month of March assuming the firm uses the earnings approach to revenue recognition? How much salaries expense should it recognize?
