Cavan Company prepared the following reconciliation between book income and taxable income for the current year ended December 31, year 1.

Pretax accounting income	$1,000,000
Taxable income	(600,000)
Difference	$400,000
Book-tax differences:
Interest on municipal income	$100,000
Lower financial depreciation	300,000
Total	$400,000

Cavan's effective Federal and state income tax rate for year 1 is 30%. The depreciation difference will reverse equally over the next three years at enacted tax rates as follows.

Year	Tax Rate
Year 2	30%
Year 3	25%
Year 4	25%

In Cavan's year 1 income statement, the deferred portion of its provision for income taxes should be:

$120,000

$80,000

$100,000

$90,000