$8,000 spent to replace the roof on the building is a capital expenditure. It will be added to the cost of building.
Value of building after roof replacement = 86,600 + 8,000
= $94,600
Accumulated depreciation on building = $40,500
Book value of building = Value of building after roof replacement - Accumulated depreciation on building
= 94,600 - 40,500
= $54,100
Book value of building = $54,100
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