Harry, an insurance representative from Main Life Insurance Company soldJanet an exempt whole life policy with annual premium of $$5,000.$ The net cost ofpure insurance was $$1,300.$ She needed some money to pay down on a car moneyand so she got a loan of $$1,000$ from the insurance company at a low rate of $2\%.$She had also collected a dividend of $$200.$ What is the ACB of the policy?$2.$ Assume we are in the year $2010.$ In $2008,$ John started working for Tictac Inc.This year the company decided to offer all its employees a defined benefit plan.The DB plan offers a pension of $1\mathrm{.}4\%$ of career $$average earning for each year ofservice. John has always maximized his RRSP contributions each year. Thecompany paid him a salary of $$60,000$ in $2008,$ $$65,000$ in $2009$ and this year it is$$70,000.$ All the employees who are plan members are given the opportunity topurchase $2$ years of past service which is exempt by CRA. What is John$$s RRSProom for the year $2011?3.$ Solomon bought a capital property several years for $$150,000.$ He sold theproperty to his best friend William for $$260,000.$ William did not have the moneyto pay for the property. Being best friends and Solomon is not in need for all themoney right now and so$,$ they agreed on an installment sale. They agreed to thefollowing:William will give Solomon $$100,000$ right now and then pay $$40,000$ per year overthe next $4$ years.What is the capital gain that Solomon has to report for each year from the year ofsale subject to the capital gains inclusion rate of $50\%?$ Show all your calculations.

$4.$ Roland is earning $$100,000$ per year as an IT professional at ABC ManufacturingInc. At the beginning of each year, Roland contributes $4\%$ of his salary to thecompany$$s defined contribution plan. The company matches $50\%$ of employee$$scontributions$.$ At present, Roland has a total of $$250,000$ in the plan. He isthinking about retiring in the next $10$ years. When he retires, he intends totransfer the accumulated value of his pension to an insurance company andpurchase an annuity. His friend, Alex who works at the insurance company toldhim that the best annuity for him given his circumstances would pay $$95$ per$$1,000$ of capital. With this is mind, he is curious to know what would be hisannual pension income from the insurance company assuming that his salaryremains the same and his investments are growing at the rate of $6\mathrm{.}5\%$ per year.What would you tell him?$5.$ Lucy has been contributing to her daughter, Joan RESP for many years. Shecontributed a total of $25,000$ and she received a total grant of Canada EducationSavings Grant of $$5,000.$ Her first RESP was opened at a bank and at that time shegot a Canada Learning Bond of $$400$ as a grant from the Government. Over theyears she invested all the money in the account in different securities and theportfolio grew to $$40,000.$ After high school, Joan took a year off to work.However, Joan continued to work for many years afterwards. After $5$ years ofworking, Joan fell terribly ill and passed away. In the year of Joan$$s passing, Lucyhas $$4,000$ in RRSP room and her marginal tax rate is $25\%,$a$.$ Explain what happens to all the money in the RESP.b$.$ Calculate the taxes that Lucy has to pay if any, on the accumulated incomepayments.