Find the amounts of the line items called "purchases" and "freight-in" on a company's income statement. The freight-in line item represents the shipping costs to have its inventory delivered. For example, assume the company's purchases are $100,000 and its freight-in costs are $20,000.
Add the company's freight-in costs to its purchases. For example, add $20,000 in freight-in costs to $100,000 in purchases, which equals $120,000.
Find the amounts of the line items called "purchase discounts" and "purchase returns and allowances" on the income statement. A supplier provides a purchase discount when a company pays its invoice within a certain time period. Purchase returns and allowances occur when a company returns merchandise to a supplier. For example, assume the company has $5,000 in purchase discounts and $10,000 in purchase returns and allowances for the accounting period.
Subtract the company's purchase discounts and purchase returns and allowances from your Step 2 result to calculate net purchases for the accounting period. For example, subtract $5,000 in purchase discounts and $10,000 in purchase returns and allowances from $120,000. This equals $105,000 in net purchases for the accounting period.