Q: How do you get your purchased folder back where it suppose to be under iTunes store icon?
A: The “Purchased” folder that appears below the iTunes Store is actually nothing more than a standard playlist with a special icon and location. If you happen to delete this playlist, iTunes will re-create it for you the next time you download content from the iTunes Store.
Since this is just a standard playlist, however, it does not necessarily encompass all of your purchased content—tracks can be removed from this playlist, and if you delete it entirely, when iTunes re-creates it only new tracks that you download from the iTunes Store will be included.
If you would like to create a playlist that keeps track of all of your purchased music, the best solution is to use a Smart Playlist. To do this, choose File, New Smart Playlist and you will be presented with a dialog box asking you to enter some criteria for the Smart Playlist. Simply use the “Kind” criteria to include items that contain the word “Protected” for standard iTunes tracks or the word “Purchased” for iTunes Plus tracks, ensuring that you also set the “Match” field to include items that match “any” criteria, rather than “all.”
The resulting Smart Playlist will show all of your purchased items, and any new items that you download from the iTunes Store will also be included in this list.