[jgmart04]

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

Common shares outstanding, 1/1 700,000

Common shares repurchased, 3/31 20,000

Conversion of preferred shares, 6/30 40,000

Common shares repurchased, 12/1 36,000

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?

***I thought we didn’t incluide preferred shares in this calculation at all. Therefore, I would have have

12/12 700k

9/12 20k

1/12 36k

682k

However, this isn’t right. Any help??