Concept:
This question examines the chronology of Indian sculptural development from early Buddhist railings to Kushana and Gupta Buddha imagery.
Step 1:
Bharhut sculpture belongs to the 2nd century BCE.
Thus it is the earliest sculpture.
Step 2:
Yaksha sculptures belong mainly to the Shunga period after Mauryan art.
Step 3:
Gandhara Buddha sculptures belong mainly to the Kushana period.
Step 4:
Katra Buddha belongs to the Mathura-Kushana tradition.
Step 5:
Sarnath Buddha belongs to the Gupta period and is the latest among the given examples.
Thus the correct sequence is:
\[
E \rightarrow A \rightarrow B \rightarrow C \rightarrow D
\]
Hence, the correct answer is:
\[
\boxed{\text{(2) E, A, B, C, D}}
\]