Johnson & Johnson reported the following for the fiscal year 2023:

• Pretax financial income: $18,000,000
• Taxable income: $17,500,000
• Temporary differences: $1,200,000 (more deductible for tax purposes next year)
• Permanent differences: $1,000,000

The corporate tax rate is 25%.

Required:

1. Calculate the current tax expense.
2. Determine the deferred tax asset or liability.
3. Prepare the journal entry to record the income tax provision for 2023.
4. Discuss the implications of deferred taxes on financial reporting and analysis.