Wholesome Foods Corporation is a producer of gourmet organic cookies. The company was established three years ago when its founder and president, Martha Spencer, purchased the trademark "Healthy Originals" and its six patented cookie recipes. Martha soon discovered that there was a specialty market for the cookies, and began marketing them as hand-decorated and personalized gourmet organic cookies for special occasions such as birthdays and bridal and baby showers. Nearly all of the company's sales are through the company's internally developed website, where customers can enter personalized orders for batches of individually decorated and wrapped cookies.
(a) Identify any intangible assets that may appear on the company's balance sheet.
(b) Discuss the importance of the intangible assets to the company's business.
(c) Referring to the conceptual framework (discussed in Chapter 2), discuss the importance of recording the intangible assets on the company's balance sheer.