5. Company D reported taxable income in the prior two years but reported tax losses in the first two quarters of the current year. The recognition of revenues and expenses for accounting purposes and...

5. Company D reported taxable income in the prior two years but reported tax losses in the first two quarters of the current year. The recognition of revenues and expenses for accounting purposes and tax purposes is exactly the same, and no tax credits are available. A tax loss is predicted for the current year. The statutory rate was 25% in the prior two years, but it is 30% in the current year. The effective annual tax rates in the first and second quarters of the current year are 18% and 28%, respectively. What might explain why the second-quarter effective tax rate is greater than the first quarter and that of the prior two years but less than 30%?