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Randolph Company reported pretax net income from continuing operations of $959,000 and taxable income of $590,000....

Randolph Company reported pretax net income from continuing operations of $959,000 and taxable income of $590,000. The book-tax difference of $369,000 was due to a $205,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $88,000 due to an increase in the reserve for bad debts, and a $252,000 favorable permanent difference from the receipt of life insurance proceeds.

c. Compute Randolph Company’s effective tax rate. (Round your answer to 2 decimal places.)

Effective tax rate %

d. Complete the reconciliation of Randolph Company’s effective tax rate with its hypothetical tax rate of 21 percent. (Amounts to be deducted should be indicated by a minus sign. Round your percentages to 2 decimal places.)
ETR reconciliation (in $)
Income tax expense at 21%
Tax benefit from permanent difference
Income tax provision
ETR reconciliation (in %)
Hypothetical income tax rate 21.00 %
Tax benefit from permanent difference %
Effective tax rate %

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ekkarill92 answered 1 year ago
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