XYZ Retail Group operates multiple stores across the United States. Here are selected financial figures for the year 2023:

Ledgers:

• Beginning Inventory: $1,000,000
• Purchases of Merchandise: $5,000,000
• Sales Revenue: $8,000,000
• Advertising Expenses: $500,000
• Salaries and Wages: $1,200,000

Income Statement Requirements:

• Prepare XYZ Retail Group's income statement for the year ended December 31, 2023.
• Calculate the Gross Profit and Operating Expenses.
• Determine the Net Income before taxes.

Other Requirements:

• Calculate the Cost of Goods Sold (CGS) for XYZ Retail Group.
• Prepare adjusting entries for any prepaid expenses and accrued revenues.
• Discuss how XYZ Retail Group can improve its profit margin in the next fiscal year.