Randolph Company reported pretax net income from continuing operations of $800,000 and taxable income of $500,000. The book-tax difference of $300,000 was due to a $200,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $80,000 due to an increase in the reserve for bad debts, and a $180,000 favorable permanent difference from the receipt of life insurance proceeds. Randolph Company’s applicable tax rate is 34%.

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.

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