Hafnaoui Company reported pretax net income from continuing operations

of $$800,000$ and taxable income of $$500,000.$ The book$-$tax difference of

$$300,000$ was due to a $$200,000$ favorable temporary difference relating to

depreciation, an unfavorable temporary difference of $$80,000$ due to an

increase in the reserve for bad debts, and a $$180,000$ favorable permanent

difference from the receipt of life insurance proceeds. At the end of the

year, the reserve for bad debts had a balance of $$100,000$; the beginning

balance in the account was $$20,000.$ Hafnaoui's beginning book $($tax$)$ basis

in its fixed assets was $$1,000,000($$$800,000)$ and its ending book $($tax$)$

basis is $$1,500,000($$$1,100,000).$

c$)$ Compute Hafnaoui Company's effective tax rate.

d$)$ Provide a reconciliation of Hafnaoui Company's effective tax rate with its

hypothetical tax rate of $21$ percent.