Chape Co. had the following information related to common and preferred shares during the year:

Common shares outstanding,1/1700,000Common shares repurchased,3/3120,000Conversion of preferred shares,6/3040,000Common shares repurchased,12/136,000

Chape reported net income of $2,000,000 at December 31. What amount of shares should Chape use as the denominator in the computation of basic earnings per share?

702,000

700,000

740,000

684,000