A is correct both times, and I would say no, you cannot say both! Obviously it's understandable, but would be seen as quite beginner English!
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lawn2llawn2a. several clerks were busily working at their desksIn normal speech, we rarely use "busily" in contexts similar to this. in fact I don't remember hearing anyone saying "working busily...". I would just say" several clerks were busy working at their desks".
lawn2llawn2a. Sandy is in the living room watching television. At th