Arrange the following steps in correct order with regard to determina…

The correct answer is Option (1) → (B), (A), (D), (C), (E)

Charges against profit (such as rent paid to a partner) are expenses and are deducted before net profit is known. Appropriations are made from the net profit in the Profit and Loss Appropriation Account, and what is left is shared.

(B) Calculation of charge against profit like rent to partner — an expense in the Profit and Loss Account.
(A) Calculation of Net profit — the result of the Profit and Loss Account.
(D) Calculation of appropriation of profits like partners salary — made in the Appropriation Account.
(C) Transfer to General Reserve as a percentage of divisible profit — worked out on the profit left after those appropriations.
(E) Calculation of each partner’s share of divisible profits — the last step.

Note: The book’s note below prints “change against profits”; it should read “charge against profits”.