Explanation:

To calculate the Average Payment Period, we use the formula:

$$

\text{Average Payment Period} = \left(\frac{\text{Creditors} + \text{Bills Payable}}{\text{Purchases}}\right) \times 365

$$

- Creditors: ?90,000

- Bills Payable: ?52,000

- Purchases: ?4,20,000

Let's calculate:

$$

\text{Average Payment Period} = \left(\frac{90,000 + 52,000}{4,20,000}\right) \times 365

$$

$$

= \left(\frac{1,42,000}{4,20,000}\right) \times 365

$$

$$

= 0.3381 \times 365

$$

$$

= 123.38 \text{ days}

$$

- Option 2: 121 days (Incorrect)

- Option 1: 123 days (Correct)

- Option 3: 132 days (Incorrect)

- Option 4: 133 days (Incorrect)

The correct answer is Option 1: 123 days.