Deaton Inc. had 300,000 shares of common stock issued and outstanding on January 1. On July 1, an additional 50,000 shares of common stock were issued for cash. Deaton also had issued unexercised stock options to purchase 40,000 shares of common stock at $15 per share outstanding at the beginning and end of the year. The average market price of Deaton's common stock was $20 during the year. What number of shares should be used in computing diluted earnings per share for the year ended December 31?

365,000

335,000

360,000

325,000