Erinn Corporation has compiled its 2017 financial statements. Included in the Long-Term Liabilities category of the balance sheet are the following amounts:

Included in the income statement are the following amounts related to income taxes:

In the notes that accompany the 2017 statement are the following amounts:
2017
Current provision for tax .....$120
Deferred portion ............ 80
Required
1. Identify and analyze the effect of the transaction in 2017 for income tax expense, deferred tax, and income tax payable.
2. Assume that a stockholder has inquired about the meaning of the numbers recorded and disclosed about deferred tax. Explain why the Deferred Tax liability account exists. Also, what do the terms current provision and deferred portion mean? Why is the deferred amount in the note $80 when the deferred amount on the 2017 balance sheet is $180?

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2017 2016 Deferred tax $180 $100 2017 $500 200 $300 2016 $400 160 2A0 Income before tax Tax expense Net income