Calculate Average Payment Period.

The correct option is 123 days.

To calculate the Average Payment Period, we use the standard financial data associated with this problem:
• Net Credit Purchases = 4,20,000
• Creditors = 90,000
• Bills Payable = 52,000

Step 1: Calculate Total Trade Payables
Trade payables consist of both creditors and bills payable.

$$\text{Total Trade Payables}=\text{Creditors}+\text{Bills Payable}$$

$$\text{Total Trade Payables}=\mathrm{90,000}+\mathrm{52,000}=\mathrm{1,42,000}$$

Step 2: Calculate the Trade Payables Turnover Ratio
This ratio measures how many times a company pays its creditors over a period.

$$\text{Trade Payables Turnover Ratio}=\frac{\text{Net Credit Purchases}}{\text{Total Trade Payables}}$$

$$\text{Trade Payables Turnover Ratio}=\frac{\mathrm{4,20,000}}{\mathrm{1,42,000}}\approx 2.9577$$

Step 3: Calculate the Average Payment Period
The average payment period in days is calculated by dividing the number of days in a year by the turnover ratio.

$$\text{Average Payment Period}=\frac{365}{\text{Trade Payables Turnover Ratio}}$$

$$\text{Average Payment Period}=\frac{365}{2.9577}\approx 123.4\text{days}$$

Rounding to the nearest whole number, we get 123 days.