4. If the cooperative is in the 15% tax rate and distributes 100% of member generated income as cash patronage and retains the after tax portion of non-member business as unallocated reserves how much unallocated reserves will be generated? 5. If the cooperative distributes 100% of member generated income as cash patronage what is its taxable income if: a. It also redeems $500 of qualified stock issued in a previous year b. It also redeems $500 of non-qualified stock issued in a previous year 6. If the cooperative distributes 100% of member generated income as cash patronage how much total funds will Member A receive and what will be Member A's taxable income associated with the cooperative be if: a. Member A has $1,000 of their qualified stock that was issued in a previous year redeemed. b. Member A has $1,000 of their non-qualified stock that was issued in a previous year redeemed. 7. Assume a cooperative has our baseline of $10,000 of member profits and $1,000 of nonmember profits and is not redeeming any stock. If the cooperative now receives $1,000 in cash patronage from a regional cooperative and distributes all of its income (including the patronage from the regional) as cash patronage... a. What will the cooperative's taxable income be? b. How much cash will Member A receive? c. How much taxable income associated with the cooperative will Member A have? 8. Assume a cooperative has our baseline of $10,000 of member profits and $1,000 of nonmember profits and is not redeeming any stock. Assuming that the cooperative does qualify for section 521 and must distribute patronage to non-members, what is the cooperative's taxable income if: a. It retains all its net margin as unallocated reserves? b. It returns all margins as cash patronage? c. It returns 50% margins in cash and 50% as qualified stock It returns 50% margins in cash and 50% as non-qualified stock? 9. Assuming that the cooperative does qualify for Section 521 and the cooperative pays $1,000 in stock dividends, how will that action impact the cooperative's taxable income? 10. Assume a farm supply cooperative distributes 15% of its net savings as cash patronage and 85% as stock. It provides written notice of allocation to its members who agreed in the membership agreement to accept the tax liability. The cooperative does 80% of its business with members and 60% of the total voting members did business with the cooperative last year. The cooperative issues a 8% dividend on stock held by members. a. Can the cooperative deduct the stock patronage refund? b. Can the cooperative deduct the dividend paid on the stock? Assume the cooperative's key financial results are reflected in the following simplified income statement: Patron Sales to Cooperative Percentage of Total Sales 1. Assuming that the cooperative does not qualify for section 521 and does not distribute patronage to non-members, what is the cooperative's taxable income if, a. It retains all its net margin as unallocated reserves? b. It returns all of member generated margins as cash patronage? c. It returns 50% of member generated margins in cash and 50% as qualified stock d. It returns 50% of member generated margins in cash and 50% as non-qualified stock? 2. If the cooperative distributes the member generated margins as 50% cash and 50% qualified stock a. How much cash will member A receive b. How much stock will member A receive c. What will member A's taxable income associated with the cooperative be? 3. If the cooperative distributes the member generated margins as 50% cash and 50% nonqualified stock a. How much cash will member A receive b. How much stock will member A receive c. What will member A's taxable income associated with the cooperative be? 4. If the cooperative is in the 15% tax rate and distributes 100% of member generated income as cash patronage and retains the after tax portion of non-member business as unallocated reserves how much unallocated reserves will be generated? 5. If the cooperative distributes 100% of member generated income as cash patronage what is its taxable income if: a. It also redeems $500 of qualified stock issued in a previous year b. It also redeems $500 of non-qualified stock issued in a previous year 6. If the cooperative distributes 100% of member generated income as cash patronage how much total funds will Member A receive and what will be Member A's taxable income associated with the cooperative be if: a. Member A has $1,000 of their qualified stock that was issued in a previous year redeemed. b. Member A has $1,000 of their non-qualified stock that was issued in a previous year redeemed. 7. Assume a cooperative has our baseline of $10,000 of member profits and $1,000 of nonmember profits and is not redeeming any stock. If the cooperative now receives $1,000 in cash patronage from a regional cooperative and distributes all of its income (including the patronage from the regional) as cash patronage... a. What will the cooperative's taxable income be? b. How much cash will Member A receive? c. How much taxable income associated with the cooperative will Member A have? 8. Assume a cooperative has our baseline of $10,000 of member profits and $1,000 of nonmember profits and is not redeeming any stock. Assuming that the cooperative does qualify for section 521 and must distribute patronage to non-members, what is the cooperative's taxable income if: a. It retains all its net margin as unallocated reserves? b. It returns all margins as cash patronage? c. It returns 50% margins in cash and 50% as qualified stock It returns 50% margins in cash and 50% as non-qualified stock? 9. Assuming that the cooperative does qualify for Section 521 and the cooperative pays $1,000 in stock dividends, how will that action impact the cooperative's taxable income? 10. Assume a farm supply cooperative distributes 15% of its net savings as cash patronage and 85% as stock. It provides written notice of allocation to its members who agreed in the membership agreement to accept the tax liability. The cooperative does 80% of its business with members and 60% of the total voting members did business with the cooperative last year. The cooperative issues a 8% dividend on stock held by members. a. Can the cooperative deduct the stock patronage refund? b. Can the cooperative deduct the dividend paid on the stock? Assume the cooperative's key financial results are reflected in the following simplified income statement: Patron Sales to Cooperative Percentage of Total Sales 1. Assuming that the cooperative does not qualify for section 521 and does not distribute patronage to non-members, what is the cooperative's taxable income if, a. It retains all its net margin as unallocated reserves? b. It returns all of member generated margins as cash patronage? c. It returns 50% of member generated margins in cash and 50% as qualified stock d. It returns 50% of member generated margins in cash and 50% as non-qualified stock? 2. If the cooperative distributes the member generated margins as 50% cash and 50% qualified stock a. How much cash will member A receive b. How much stock will member A receive c. What will member A's taxable income associated with the cooperative be? 3. If the cooperative distributes the member generated margins as 50% cash and 50% nonqualified stock a. How much cash will member A receive b. How much stock will member A receive c. What will member A's taxable income associated with the cooperative be