Complete the sequence where interest on capital has to be provided as per partnership deed, but available profits are not sufficient to provide full amount of Interest on capital.

A. If it is appropriation, calculate interest on capital for all partners at given rate
B. Divide the available amount in the capital ratio among the partners
C. Calculate ratio between capital of partners
D. Consider the partnership deed and decide whether interest on capital is a charge or an appropriation
E. Consider the available profit

Choose the correct answer from the options given below:

D, A, E, C, B

The correct answer is option 3- D, A, E, C, B.

The correct sequence of actions to follow when interest on capital has to be provided but the available profits are insufficient to cover the full amount is as follows-

D (Consider the partnership deed and decide whether interest on capital is a charge or an appropriation): First of all, the partnership deed is considered and it is seen whether interest on capital is a charge or an appropriation. If it is charge then interest is provided without considering profit or loss and if it is appropriation then profit is considered because interest can not be provided more than profit.

A (If it is appropriation, calculate interest on capital for all partners at the given rate): Once it is determined that interest on capital is an appropriation, calculate the amount to be allocated based on the deed.

E (Consider the available profit): Determine the total available profit that can be distributed among the partners.

C (Calculate the ratio between capital of partners): The capital ratio helps to determine how profits (or in this case, available profits) should be distributed among the partners.

B (Divide the available amount in the capital ratio among the partners): Once the capital ratio is known, divide the available profits accordingly among the partners.