Arrange the following steps in correct order with regard to determination of divisible profits of partners.

(A) Calculation of Net profit
(B) Calculation of charge against profit like rent to partner
(C) Transfer to General Reserve as a percentage of divisible profit
(D) Calculation of appropriation of profits like partners salary
(E) Calculation of each partner's share of divisible profits

Choose the correct answer from the options given below:

(B), (A), (D), (C), (E)

The correct answer is option 1- (B), (A), (D), (C), (E).

(B) Calculation of charge against profit like rent to partner- First of all charges against profit are transferred to profit and loss account which will help in knowing the net profit.

(A) Calculation of Net profit - After charging all charges to profit and loss account, net profit is calculated.

(D) Calculation of appropriation of profits like partners salary- After calculating the net profit through profit and loss account, this profit is transferred to profit and loss appropriation account. After transferring profit all the appropriation like salary, commission, interest on capital is debited to the profit and loss appropriation account to find out the divisible profit.

(C) Transfer to General Reserve as a percentage of divisible profit- After finding out the divisible profit, if any reserve is to be created then amount of divisible profit is transferred to reserve.

(E) Calculation of each partner's share of divisible profits- After transferring the reserve amount, if any, the remaining profit is distributed between partners in their profit sharing ratio.