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 sovAlternative 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 Shares Issued S Election and Effective Date Outstanding 10,000 January 1, 2019 common shares Busy Bee 1515 North Lincoln Highway Clothing, Inc. Charlotte, NC 28201 14-2953556 February 2, 2003 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 $112,000 Chief Executive Officer 524-31-3493 4,300 Chief Financial Officer 482-26-5241 2,300 $80,000 Jennifer 85 Shady Elm Lyons Charlotte, NC 28201 Lee RD Route 843 Newberry Rural Hall, NC 27045 Brianna 35 S. Main Street Taylor Mt. Airy, NC 27030 Abby 9851 Old Colonial Highway Williams Charlotte, NC 28201 Chief Operating Officer 545-16-4239 2,200 $90,000 429-82-9384 1,200 Not an officer N/A The table belowiecoxides pertinent account balances as of December 31, 2019 for BB: Description Accumulated earnings and profits Accumulated adjustments account Other adjustments account 12/31/2019 Balance $500,000 $125,000 $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. Be purchases inventory and resells the purchases. On December 1, 2020, BB made a pro rata distribution to all common stockholders, totaling $200,000 BE's MACRS depreciation is $215,000 Be maintains a life insurance policy on the life of the CEO, Jennifer Lyons. BB is the beneficiary sftbet policy. In March 2020, BB contributed $30,000 in cash to the Red Cross to assist those affected butecoados in Nashville, Tennessee. . . Busy Bee Clothing, Inc. Balance Sheet Assets: Cash Accounts Receivable Inventory Prepaid Rent Tax-exempt Securities U.S. Treasury Bonds Fixed Assets Less: Acc. Depreciation Land Total Assets: 12/31/2019 $340,000 205,000 2,500,000 150,000 100,000 200,000 4,000,000 (2,850,000) 250,000 $4,895,000 12/31/2020 $500,000 232,000 1,500,000 175,000 100,000 200,000 4,750,000 (3,000,000) 250,000 $4,707,000 Liabilities and Shareholders' Equity: Accounts Payable Accounts Payable Short Term Notes Payable Long Term Notes Payable Capital Stock Additional paid-in Capital Retained Earnings Total Liabilities and Shareholders' Equity $100,000 525,000 3,500,000 1,000 99,000 670,000 $4,895,000 $154,650 675,000 3,200,000 1,000 99,000 577,350 $4,707,000 Busy Bee Clothing, Inc Income Statement For the year ending December 31, 2020 Amount $8,000,000 350.000 7,650,000 5,000,000 2,650,000 4,000 6,000 2.400 $2,662,400 Item Income: Gross Sales Less: Returns Net Sales Cost of Goods Sold Gross Profit Interest income-Bank Interest Income-U.S. Gov't Municipal Bond Interest Income Total Income: Expenses: Advertising Charitable Contribution Depreciation Employee Benefit Programs Employee Salaries Entertainment Insurance Interest Expense (business related) Key employee Insurance Meals Office Supplies Officer Salaries Payroll Taxes Property Taxes Rent Repairs and Maintenance Supplies Telephone Utilities Total Expenses: Net Income (Loss): $50,000 30,000 150,000 133,000 425,000 3,750 18,000 175,500 12,000 8,500 5,300 282,000 75,000 10,750 765,000 12,500 13,750 142,000 243.000 $2.555.050 $107,350 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 sovAlternative 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 Shares Issued S Election and Effective Date Outstanding 10,000 January 1, 2019 common shares Busy Bee 1515 North Lincoln Highway Clothing, Inc. Charlotte, NC 28201 14-2953556 February 2, 2003 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 $112,000 Chief Executive Officer 524-31-3493 4,300 Chief Financial Officer 482-26-5241 2,300 $80,000 Jennifer 85 Shady Elm Lyons Charlotte, NC 28201 Lee RD Route 843 Newberry Rural Hall, NC 27045 Brianna 35 S. Main Street Taylor Mt. Airy, NC 27030 Abby 9851 Old Colonial Highway Williams Charlotte, NC 28201 Chief Operating Officer 545-16-4239 2,200 $90,000 429-82-9384 1,200 Not an officer N/A The table belowiecoxides pertinent account balances as of December 31, 2019 for BB: Description Accumulated earnings and profits Accumulated adjustments account Other adjustments account 12/31/2019 Balance $500,000 $125,000 $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. Be purchases inventory and resells the purchases. On December 1, 2020, BB made a pro rata distribution to all common stockholders, totaling $200,000 BE's MACRS depreciation is $215,000 Be maintains a life insurance policy on the life of the CEO, Jennifer Lyons. BB is the beneficiary sftbet policy. In March 2020, BB contributed $30,000 in cash to the Red Cross to assist those affected butecoados in Nashville, Tennessee. . . Busy Bee Clothing, Inc. Balance Sheet Assets: Cash Accounts Receivable Inventory Prepaid Rent Tax-exempt Securities U.S. Treasury Bonds Fixed Assets Less: Acc. Depreciation Land Total Assets: 12/31/2019 $340,000 205,000 2,500,000 150,000 100,000 200,000 4,000,000 (2,850,000) 250,000 $4,895,000 12/31/2020 $500,000 232,000 1,500,000 175,000 100,000 200,000 4,750,000 (3,000,000) 250,000 $4,707,000 Liabilities and Shareholders' Equity: Accounts Payable Accounts Payable Short Term Notes Payable Long Term Notes Payable Capital Stock Additional paid-in Capital Retained Earnings Total Liabilities and Shareholders' Equity $100,000 525,000 3,500,000 1,000 99,000 670,000 $4,895,000 $154,650 675,000 3,200,000 1,000 99,000 577,350 $4,707,000 Busy Bee Clothing, Inc Income Statement For the year ending December 31, 2020 Amount $8,000,000 350.000 7,650,000 5,000,000 2,650,000 4,000 6,000 2.400 $2,662,400 Item Income: Gross Sales Less: Returns Net Sales Cost of Goods Sold Gross Profit Interest income-Bank Interest Income-U.S. Gov't Municipal Bond Interest Income Total Income: Expenses: Advertising Charitable Contribution Depreciation Employee Benefit Programs Employee Salaries Entertainment Insurance Interest Expense (business related) Key employee Insurance Meals Office Supplies Officer Salaries Payroll Taxes Property Taxes Rent Repairs and Maintenance Supplies Telephone Utilities Total Expenses: Net Income (Loss): $50,000 30,000 150,000 133,000 425,000 3,750 18,000 175,500 12,000 8,500 5,300 282,000 75,000 10,750 765,000 12,500 13,750 142,000 243.000 $2.555.050 $107,350