Q-1. it patronage income is distributed back to the members on a non-qualified basis, who Initially pays the tax? Options: No tax is paid because it is distributed on a non-qualified basis No one initially but the farmers will pay the tax when they receive the cash The cooperative The members
Q-1. it patronage income is distributed back to the members on a non-qualified basis, who Initially pays the tax?
Options:
No tax is paid because it is distributed on a non-qualified basis
No one initially but the farmers will pay the tax when they receive the cash
The cooperative
The members
Q-2. In the early 2000s, the Farmland Industries bankruptcy caused a lot of financial stress for Kansas grain marketing and farm supply cooperatives. To deal with this stress, most co-ops wrote down unallocated equity values. Why did they take this action?
Options:
It was to the benefit of the member because non-members mostly paid for the losses incurred by the cooperative
It was to the benefit of the member because unallocated equity is directly tied to the copperative
Members actually voted for this decision because they wanted to lose their allocated equity
Members would benefit because writing down unallocated equity actually caused them to own a smaller percentage of the cooperative and therefore would be less exposed to future financial stress
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