The Weighted average method of calculating goodwill is used in which of the following cases?

Profits are equal Profit has increasing trend Profit has decreasing trend Either (b) or (c)

Either (b) or (c)

Sometimes, if there exists an increasing on decreasing trend, it is considered to be better to give a higher weightage to the profits to the recent years than those of the earlier years. Hence, it is a advisable to work out weighted average based on specified weights like 1, 2, 3, 4 for respective year’s profit.