Simmox Companys income before taxes is $ 290,000 and its tax rate is 35%. Note that $

Question:

Simmox Company’s income before taxes is $ 290,000 and its tax rate is 35%. Note that $ 40,000 is non- taxable interest income from its investment in municipal bonds, and is included in $ 290,000. There are no other book- tax differences. Prepare a reconciliation of Simmox’s statutory tax rate to its effective tax rate.