Terry and Jim are both involved in operating illegal businesses. Terry operates a gambling business and Jim operates a drug running business. Both businesses have gross revenues of $500,000. The businesses incur the following expenses. Terry Jim Employee salaries $200,000 $200,000Bribes to police 25,000 25,000Rent and utilities 50,000 50,000Cost of goods sold 0 125,000Which of the following statements is correct and why (1-3 sentence justification)?a. Neither Terry nor Jim can deduct any of the above items in calculating the business profit. b.Terry should report profit from his business of $250,000.c. Jim should report profit from his business of $500,000.d. Jim should report profit from his business of $250,000.e. None of the above.