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Randolph Company reported pretax net income from continuing operations of $1,058,000 and taxable income of $715,000. The book-tax difference of $343,000 was due to a
Randolph Company reported pretax net income from continuing operations of $1,058,000 and taxable income of $715,000. The book-tax difference of $343,000 was due to a $298,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $159,000 due to an increase in the reserve for bad debts, and a $204,000 favorable permanent difference from the receipt of life insurance proceeds. d. Provide a 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% Income tax provision ETR reconciliation (in %) Hypothetical income tax rate 21.00 % Effective tax rate %
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