Hafnaoui Company reported pretax net income from continuing operations of $$1,104,000$ and taxable income of $$661,500.$ The book$$tax difference of $$442,500$ was due to a $$295,000$ favorable temporary difference relating to depreciation, an unfavorable temporary difference of $$118,000$ due to an increase in the reserve for bad debts, and a $$265,500$ favorable permanent difference from the receipt of life insurance proceeds. At the end of the year, the reserve for bad debts had a balance of $$147,500$; the beginning balance in the account was $$29,500.$ Hafnaoui's beginning book $($tax$)$ basis in its fixed assets was $$1,038,000($$$857,000)$ and its ending book $($tax$)$ basis is $$1,595,000($$$1,119,000).$