Arrange the following steps in correct sequence.

A. Transfer of accumulated reserve
B. Calculation of revaluation gain/loss
C. Balancing capital of old partner
D. Adjustment of goodwill
E. Calculation of proportionate capital of new partner

Choose the correct answer from the options given below:

B, D, A, C, E

The correct answer is Option (4) - B, D, A, C, E.

Calculation of revaluation gain/loss (Step B): Before admitting a new partner, the existing assets and liabilities of the partnership firm are revalued to reflect their current market values. The revaluation is done to ensure that the new partner enters the partnership with accurate and up-to-date values of the assets and liabilities.

Adjustment of goodwill (Step D): Goodwill represents the value of the reputation and customer base of the firm. When a new partner is admitted, the existing goodwill of the firm may need to be adjusted to account for the new partner's contribution to the firm. If the new partner brings in additional value, goodwill may increase, and if the new partner's entry decreases the overall value, goodwill may decrease.

Transfer of accumulated reserve (Step A): Accumulated reserves, such as general reserves or specific reserves, may exist in the books of the partnership. These reserves need to be transferred or adjusted when a new partner is admitted to ensure that the new partner's capital is appropriately accounted for.

Balancing capital of old partner (Step C): The admission of a new partner can affect the capital accounts of the existing partners. The capital accounts of the old partners need to be adjusted to reflect the changes in the firm's value due to the admission of the new partner.

Calculation of proportionate capital of new partner (Step E): Once all adjustments are made, the capital of the new partner is calculated based on the agreed-upon profit-sharing ratio or investment ratio. This ensures that the new partner's capital is appropriately determined and recorded in the books of accounts.