The fund financial statements of the City of Variance Falls display total fund balances for all governmental funds of $500,000 for the year ended December 31, 20X5.  Staff have compiled the following data as of December 31, 20X5 relative to governmental funds and governmental activities:

Capital assets used in city operations                                    $ 600,000

Accumulated depreciation                                                       250,000

Infrastructure (roads, bridges, etc.)                                      1,500,000

Accumulated depreciation                                                       850,000

Bonds payable used to finance capital

  assets used to in city operations                                            450,000

Road and bridge bonds payable                                              350,000

Variance Falls uses the modified approach to report infrastructure.  The City of Variance Falls would report Net Assets associated with its governmental activities in its government-wide financial statements at December 31, 20X5 of:

A.      50,000

B.      400,000

C.      700,000

D.      1,050,000

The correct answer is A. The answer doesn’t include (1)Infrastructure (roads, bridges, etc.) 1,500,000 and (2) Accumulated depreciation 850,000…my question is what do we do with them? Where do we post them or where do we disclose? We just disclose in the RSI section ? Thanks !!!