Question 3 Rasher Construction Limited (RCL) entered ioto a contract to construct a building for $975,000. The contract provided for progress payments. RCL's accounting year ends December 31. Work began under the contract on August 1 2017 and was completed on October 31, 2019. Construction activities are summarized below: Construction costs incurred during the year Estimated remaining costs to complete Progress Billings to date Cash Collections to date 2017 180,000 630,000 153,000 140,000 2018 450,000 190,000 535,500 375,000 2019 195,000 0 975,000 450,000 REQUIRED 1. Record RCL's journal entries assuming that the percentage-of-completion method is used. Assume that the percentage of completion is measured by the ratio of costs incurred to date divided by total estimated construction costs. 2. Complete the following table for RCL using the percentage-of-completion method (as of and for the year ended December 31) 2017 2018 2019 Accounts Receivable CIP Inventory Billings on Contract Cost in excess of billings Construction Revenue Costs of Construction Gross Profit 3. How could management of RCL manipulate the accounting for this construction contract in order to achieve its motivation of maximizing net income (eg to earn a bigger bonus) in the earlier years