In Android Studio's Preferences, go to Editor > Code Style > XML. Then select the Android tab on the far right. There are options in this tab to customize the formatting of Android XML files (manifest, layouts, etc.). Make sure Use custom formatting settings for Android XML files is checked. Then you can just format that file like you do any other file Code > Reformat Code.
To get rid of the space before closing tags, go to the Other tab. Under Spaces make sure In empty tag and After tag name are un-checked.