Reference no: EM132654131

Question - Randolph Company reported pretax net income from continuing operations of $877,500 and taxable income of $602,500. The book-tax difference of $275,000 was due to a $242,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $171,000 due to an increase in the reserve for bad debts, and a $204,000 favorable permanent difference from the receipt of life insurance proceeds.

Required -

a. Compute Randolph Company's current income tax expense.

b. Compute Randolph Company's deferred income tax expense or benefit.

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

d. Provide a reconciliation of Randolph Company's effective tax rate with its hypothetical tax rate of 21 percent.