Treasury Shares in Switzerland Nestl N.A., the Swiss food and beverage company, is 22% owned by U.S. citizens. It reported the fol- lowing in its 2002 end-of-year balance sheet (in millions of CHF, swiss frames): Shareholders' funds Share capital CHF Share premium and reserves 404 36,993 Less: Treasury shares Total equity (2,578) CHF 34,819 During 2002, Nestl purchased 1,837,972 of its own shares for CHF 606 million. Sales of 1,103,167 shares generated CHF 392 million. Assume no other changes in Nestl's holdings of its own shares. The balance in the Own shares account at the beginning of year was CHF 2,794 million. 1. Restate Nestl's Shareholders' funds section of its balance sheet using terms more commonly used in the United States. 2. Prepare journal entries for Nestl's purchase of its own shares during the year. 3. Prepare journal entries for Nestl's reissue of 275 shares for the exercise of stock options. Assume the exercise price was CHF 200 per share and that the reissued shares were all among those pur- chased during the year. 4. Comment on the average price paid for the shares repurchased this year compared with the pro- ceeds from resale of shares.