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Randolph Company reported pretax net income from continuing operations of $1,077,500 and taxable income of $657,500. The book-tax difference of $420,000 was due to a
Randolph Company reported pretax net income from continuing operations of $1,077,500 and taxable income of $657,500. The book-tax difference of $420,000 was due to a $252,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $86,000 due to an increase in the reserve for bad debts, and a $254,000 favorable permanent difference from the receipt of life insurance proceeds. Compute Randolph Companys effective tax rate
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