Please complete the 2020 tax return for Busy Bee Clothing, Inc. based upon the facts presented below. If required information is missing, use reasonable assumptions to fill in the gaps. Ignore anyAlternative Minimum Tax (AMT) calculations or reporting. Busy Bee Clothing, Inc. (BB) is organized as a corporation in the state of North Carolina and is taxedas an "S" corporation with a calendar-year end (additional information about BB can be found in the table below). BB operates four small boutique clothing outlet stores (family clothing stores) in the North Carolina cities of Charlotte, Durham, Raleigh, and Winston-Salem. Name Address (has not changed since inception) Employer Identification Number Date Incorporated S Election Effective Date Shares Issued and Outstanding 10,000 Busy Bee Clothing, Inc. 1515 North Lincoln Highway Charlotte, NC 28201 14-2953556 February 2, 2003 January 1, 2019 common shares BB is owned by four unrelated shareholders (shareholder-specific information is provided in the tablebelow). There were no stock transfers or changes in stock ownership during the current tax year. Name Address Social Security Shares Number Owned Officer Title 2020 Officer Compensation Jennifer 85 Shady Elm Chief Executive Officer 524-31-3493 4,300 $112,000 Lyons Lee Charlotte, NC 28201 RD Route 843 Chief Financial Officer 482-26-5241 2,300 $80,000 Newberry Rural Hall, NC 27045 Brianna 35 S. Main Street Chief Operating Officer 545-16-4239 2,200 $90,000 Taylor Mt. Airy, NC 27030 Abby 9851 Old Colonial Highway 429-82-9384 1,200 Not an officer N/A Williams Charlotte, NC 28201 The table belowprovides pertinent account balances as of December 31, 2019 for BB: Description 12/31/2019 Balance Accumulated earnings and profits $500,000 Accumulated adjustments account $125,000 Other adjustments account $45,000 Supplementary Details: BB uses the accrual method of accounting. For any 'yes' or 'no' questions on Schedule B, assume the answer is 'no' unless explicitly stated in the facts below. BB made payments in the current year that required the filing of Forms 1099. All Forms 1099were filed timely. BB's original, unadjusted basis in all its assets is consistent with historical cost on the balancesheet. BB's three officers devoted 100% of their time to the company. Additional information: None of the expenses incurred by BB during the year relate to the production or carrying of thetax-exempt securities held in portfolio. The tax-exempt securities are maintained in a separate brokerage account distinct from other holdings. BB values its inventory at cost and has always used the specific identification method for reporting purposes. BB purchases inventory and resells the purchases. On December 1, 2020, BB made a pro rata distribution to all common stockholders, totaling $200,000. BB's MACRS depreciation is $215,000 BB maintains a life insurance policy on the life of the CEO, Jennifer Lyons. BB is the beneficiary that policy. In March 2020, BB contributed $30,000 in cash to the Red Cross to assist those affected bytornados in Nashville, Tennessee. Busy Bee Clothing, Inc. Balance Sheet Assets: Cash 12/31/2019 12/31/2020 $340,000 $500,000 Inventory Accounts Receivable Prepaid Rent Tax-exempt Securities 205,000 232,000 2,500,000 1,500,000 150,000 175,000 100,000 100,000 U.S. Treasury Bonds 200,000 200,000 Fixed Assets 4,000,000 4,750,000 Less: Acc. Depreciation (2,850,000) (3,000,000) Land 250,000 250,000 Total Assets: $4,895,000 $4,707,000 Liabilities and Shareholders' Equity: Accounts Payable Accounts Payable $100,000 $154,650 Short Term Notes Payable 525,000 675,000 Long Term Notes Payable 3,500,000 3,200,000 Capital Stock 1,000 1,000 Additional paid-in Capital 99,000 99,000 Retained Earnings 670,000 577,350 Total Liabilities and Shareholders' Equity $4,895,000 $4,707,000 Busy Bee Clothing, Inc Income Statement For the year ending December 31, 2020 Item Amount Income: Gross Sales Less: Returns Net Sales $8,000,000 350,000 7,650,000 Cost of Goods Sold 5,000,000 Gross Profit 2,650,000 Interest Income-Bank 4,000 Interest Income-U.S. Gov't 6,000 Municipal Bond Interest Income 2,400 Total Income: $2,662,400 Expenses: Advertising $50,000 Charitable Contribution 30,000 Depreciation 150,000 Employee Benefit Programs 133,000 Employee Salaries 425,000 Entertainment 3,750 Insurance 18,000 Interest Expense (business related) 175,500 Key employee Insurance 12,000 Meals 8,500 Office Supplies 5,300 Officer Salaries 282,000 Payroll Taxes 75,000 Property Taxes 10,750 Rent 765,000 Repairs and Maintenance 12,500 Supplies 13,750 Telephone 142,000 Utilities Total Expenses: Net Income (Loss): 243,000 $2,555,050 $107,350