XYZ Ltd. experienced the following transactions in January 2024:

• January 3: Purchased inventory for $28,000, paying $12,000 in cash and the rest on account.
• January 8: Sold goods costing $14,000 for $20,000 on account.
• January 12: Paid $1,300 for advertising expenses.
• January 18: Collected $9,000 from customers on account.
• January 23: Paid suppliers $10,000.
• January 27: Declared and paid dividends of $2,000.

Requirements:

1. Record the journal entries for the transactions.
2. Post the journal entries to the ledger.
3. Prepare a trial balance as of January 31, 2024.
4. Prepare an income statement for January 2024.
5. Explain the role of advertising expenses in promoting sales.