##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number: 33-69996
 COMMONWEALTH INCOME & GROWTH FUND I
  Pennsylvania
    
    23-2735641(State or other jurisdiction of
    
    (I.R.S. Employer Identification Number)incorporation or organization)
 
 
  Title of each class to 
be so registered
    
    Name of exchange on
which each class
is to be registeredNone
    
    N/A
  Units of Limited Partnership Interest
 o þ
 o þ
 þ o
 þ o
 o þ
 o þ




---



##### 



FORM 10-K
DECEMBER 31, 2006
 TABLE OF CONTENTS
  
 PART IItem 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    6Item 1B.
    
    Unresolved Staff Comments
    
    
    7Item 2.
    
    Properties
    
    
    7Item 3.
    
    Legal Proceedings
    
    
    7Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    7PART IIItem 5.
    
    Market for Registrants Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity
Securities
    
    
    7Item 6.
    
    Selected Financial Data
    
    
    9Item 7.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    10Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    14Item 8.
    
    Financial Statements and Supplementary Data
    
    
    14Item 9.
    
    Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
    
    
    14Item 9A.
    
    Controls and Procedures
    
    
    15Item 9B.
    
    Other Information
    
    
    15PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    15Item 11.
    
    Executive Compensation
    
    
    19Item 12.
    
    Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    19Item 13.
    
    Certain Relationships and Related Transactions and
Director Independence
    
    
    19Item 14.
    
    Principal Accountant Fees and Services
    
    
    24PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    25Index to ExhibitsSignaturesCertificationsRule 13a-14(a)/15d-14(a) Certifications by the Principal Executive OfficerRule 13a-14(a)/15d-14(a) Certifications by the Principal Financial OfficerSection 1350 Certifications by the Principal Executive Officer and Principal Financial Officer
  2




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##### Table of Contents



PART I
 
 ITEM 1: BUSINESS
 GENERAL
    PRINCIPAL INVESTMENT OBJECTIVES
  TYPES OF EQUIPMENT
 Computer Information Technology Equipment.
  3




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DESCRIPTION OF LEASES
     LIQUIDATION POLICIES
  MANAGEMENT OF EQUIPMENT
  4




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##### Table of Contents



GENERAL RESTRICTIONS
  (a)
    
    invest in junior trust deeds unless received in connection with the sale of an item of
Equipment in an aggregate amount which did not exceed 30% of the assets of the
Partnership on the date of the investment;(b)
    
    invest in or underwrite the securities of other issuers;(c)
    
    acquire any Equipment for Units;(d)
    
    issue senior securities (except that the issuance to lenders of notes or
other evidences of indebtedness in connection with the financing or refinancing
of Equipment or the Partnerships business was not deemed to be the issuance of senior
securities);(e)
    
    make loans to any Person, including the General Partner or any of its
Affiliates, except to the extent a Conditional Sales Contract constitutes a loan;(f)
    
    sell or lease any Equipment to, lease any Equipment from, or enter into any
sale-leaseback transactions with, the General Partner or any of its Affiliates; or(g)
    
    give the General Partner or any of its Affiliates an exclusive right or
employment to sell the Partnerships Equipment.
  EMPLOYEES
  
 ITEM 1A. RISK FACTORS
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2: PROPERTIES
  
 ITEM 3: LEGAL PROCEEDINGS
  
 ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  5




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##### Table of Contents



PART II
 
 ITEM 5:
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
  GENERAL LIMITATIONS
  ALLOCATION AND DISTRIBUTION BETWEEN THE GENERAL PARTNER AND THE LIMITED PARTNERS
      ALLOCATIONS AND DISTRIBUTIONS AMONG THE LIMITED PARTNERS
 6




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ITEM 6: SELECTED FINANCIAL DATA
  Statements of Operations
    
    Period ended
    
    

YEARS
ENDED DECEMBER 31,Data:
    
    June 30, 2005
    
    
    2004
    
    
    2003
    
    
    2002Lease Income
    
    $
    47,452
    
    
    $
    258,552
    
    
    $
    331,958
    
    
    $
    405,772Net (Loss) / Income
    
    
    (147,218
    )
    
    
    (136,479
    )
    
    
    (114,587
    )
    
    
    (237,111
    )Cash Distributions
to Limited Partners
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net (Loss) / Income
Allocated to
Limited Partners
    
    
    (147,218
    )
    
    
    (136,479
    )
    
    
    (114,587
    )
    
    
    (237,111
    )Net (Loss) / Income
Per Limited Partner
Unit
    
    
    (.23
    )
    
    
    (.22
    )
    
    
    (.18
    )
    
    
    (.38
    )Cash Distribution
Per Limited Partner
Unit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 7




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##### Table of Contents



Period ended
    
    

FOR THE YEARS ENDED DECEMBER 31,Other Data:
    
    June 30, 2005
    
    
    2004
    
    
    2003
    
    
    2002Net cash provided
by (used in)
operating
activities
    
    $
    10,183
    
    
    $
    27,849
    
    
    ($
    64,210
    )
    
    ($
    2,263
    )Net cash provided
by (used in)
investing
activities
    
    
    23,795
    
    
    
    16,989
    
    
    
    65,181
    
    
    
    (10,329
    )Net cash provided
by (used in)
financing
activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,948
 AS OF DECEMBER 31,
 2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Total Assets
    
    $
    
    
    
    $
    58,223
    
    
    $
    303,612
    
    
    $
    684,151
    
    
    $
    968,125Notes Payable
    
    
    
    
    
    
    5,906
    
    
    
    17,158
    
    
    
    168,343
    
    
    
    444,732Partners Capital
    
    
    
    
    
    
    
    
    
    
    (49,906
    )
    
    
    86,573
    
    
    
    201,160Net assets in
liquidation
    
    $
    
    
    
    $
    
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
  
 ITEM 7: MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   8




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NET ASSETS IN LIQUIDATION
  REVENUE RECOGNITION
  LONG-LIVED ASSETS
   REIMBURSABLE EXPENSES
  LIQUIDITY AND CAPITAL RESOURCES
    9




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RESULTS OF OPERATIONS
         10




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NET LOSS
  COMMITMENTS AND CONTINGENCIES
 Contractual Cash Obligations
  Total
    
    
    2005Installment notes payable due 2006:Principal
    
    $
    5,906
    
    
    $
    5,906Interest
    
    
    112
    
    
    
    112Total
    
    $
    6,018
    
    
    $
    6,018
  RECENT ACCOUNTING PRONOUNCEMENTS
 (SAB 108)
 
 ITEM 7.A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 8: FINANCIAL STATEMENTS
  
 ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
  11




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ITEM 9A: CONTROLS AND PROCEDURES
  
 ITEM 9B: OTHER INFORMATION
  
 ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 GENERAL
    NAME
    
    TITLEKimberly A. Springsteen
    
    Chairman of the Board, Chief Executive Officer, Chief Compliance Officer
of CCC, CCSC, & CIGF, Inc.Henry J. Abbott
    
    President of CCC & CIGF, Inc.
Director of CCC, CCSC & CIGF, Inc.Katrina M. Mason
    
    President of CCSC, Due Diligence Officer, Director of CCC, CCSC & CIGF, Inc.Lynn A. Franceschina
    
    Executive Vice President, Director of CCC, CCSC & CIGF, Inc.Jay Dugan
    
    Executive Vice President & Chief Technology Officer of CCC, CCSC & CIGF, Inc. and Director of CCCPeter Daley
    
    Independent Director of CCCRichard G. Devlin III
    
    Vice President and General Counsel of CCC, CCSC & CIGF Inc.Edmond J. Enderle
    
    Vice President and Controller of CCC, CCSC, & CIGF Inc.
 12




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##### Table of Contents



NAME
    
    TITLEJames Green
    
    Vice President & Portfolio Manager of CCC & CIGF, Inc.James Pruett
    
    Vice President & Compliance Officer of CCC, CCSC, & CIGF, Inc.Mark Hershenson
    
    Vice President & Broker Services Manager of CCC, CCSC & CIGF, Inc.Donna Abbott
    
    Vice President & Investor Services Manager of CCC, CCSC & CIGF, Inc.
 Kimberly A. Springsteen,
 Henry J. Abbott
 Katrina M. Mason ,
 13




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##### Table of Contents



Lynn A. Franceschina
 Jay Dugan
 Peter Daley
 Richard G. Devlin III,
 14




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##### Table of Contents



Edmond J. Enderle,
 James Green ,
 James Pruett
 Mark Hershenson
 15




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##### Table of Contents



Donnamarie D. Abbott
   CODE OF ETHICS
  
 ITEM 11: EXECUTIVE COMPENSATION
  
 ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  
 ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  16




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AMOUNT
    
    AMOUNT
    
    AMOUNTENTITY RECEIVING
    
    
    
    INCURRED
    
    INCURRED
    
    INCURREDCOMPENSATION
    
    TYPE OF COMPENSATION
    
    DURING 2006
    
    DURING 2005
    
    DURING 2004The General Partner
    
    Equipment
Acquisition Fee. An
Equipment
Acquisition Fee of
four percent of the
Purchase Price of
each item of
Equipment purchased
as compensation for
the negotiation of
the acquisition of
the Equipment and
the lease thereof
or sale under a
Conditional Sales
Contract. The fee
was paid upon each
closing of the
Offering with
respect to the
Equipment purchased
by the Partnership
with the net
proceeds of the
Offering available
for investment in
Equipment. If the
Partnership
acquires Equipment
in an amount
exceeding the net
proceeds of the
Offering available
for investment in
Equipment, the fee
will be paid when
such Equipment is
acquired.
    
    $
    0
    
    
    $
    0
    
    
    $
    0The General Partner
and its Affiliates
    
    Reimbursable
Expenses. The
General Partner and
its Affiliates are
entitled to
reimbursement by
the Partnership for
the cost of goods,
supplies or
services obtained
and used by the
General Partner in
connection with the
administration and
operation of the
Partnership from
third parties
unaffiliated with
the General
Partner. In
addition, the
General Partner and
its affiliates are
entitled to
reimbursement of
certain expenses
incurred by the
General Partner and
its affiliates in
connection with the
administration and
operation of the
Partnership. The
amounts set forth
on this table do
not include
expenses incurred
in the offering of
Units.
    
    $
    0
    
    
    $
    18,000
    
    
    $
    22,000The General Partner
    
    Equipment
Management Fee. A
monthly fee equal
to the lesser of
(i) the fees which
would be charged by
an independent
third party for
similar services
for similar
equipment or (ii)
the sum of (a) two
percent of (1) the
Gross Lease
Revenues
attributable to
Equipment which is
subject to Full
Payout Net Leases
which contain Net
Lease provisions
plus (2) the
purchase price paid
on Conditional
Sales Contracts as
received by the
Partnership and (b)
five percent of the
Gross Lease
Revenues
attributable to
Equipment which is
subject to
Operating Leases.
    
    $
    0
    
    
    $
    0
    
    
    $
    2,000The General Partner
    
    Equipment
Liquidation Fee.
With respect to
each item of
Equipment sold by
the General Partner
(other than in
connection with a
Conditional Sales
Contract), a fee
equal to the lesser
of (i) 50% of the
Competitive
Equipment Sale
Commission or (ii)
three percent of
the sales price for
such Equipment. The
payment of such fee
is subordinated to
the receipt by the
Limited Partners of
(i) a return of
their Capital
Contributions and
10% annum
cumulative return,
compounded daily,
on Adjusted Capital
Contributions
(Priority Return)
and (ii) the Net
Disposition
Proceeds from such
sale in accordance
with the
Partnership
Agreement. Such fee
is reduced to the
extent any
liquidation or
resale fees are
paid to
unaffiliated
parties.
    
    $
    0
    
    
    $
    1,00
    
    
    $
    500The General Partner
    
    Partnership Interest. The
General Partner has a
present and continuing
one percent interest of
$1,000 in the
Partnerships item of
income, gain, loss,
deduction, credit, and
tax preference. In
addition, the General
Partner receives one
percent of Cash Available
for Distribution until
the Limited Partners have
received distributions of
Cash Available for
Distribution equal to
their Capital
Contributions plus the
10% Priority Return and
thereafter, the General
Partner will receive 10%
of Cash Available for
Distribution.
    
    $
    500
    
    
    $
    300
    
    
    $
    0
 17




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GLOSSARY
           18




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19




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20




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ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES
 AUDIT FEES
  AUDIT-RELATED FEES
  TAX FEES
  ALL
OTHER FEES
  PRE-APPROVAL POLICIES AND PROCEDURES
   
 PART IV
 
 ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 21




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(a) (1)
    
    Financial StatementsReport of Independent Registered Public Accounting Firm
    
    F-1This page not used
    
    F-2Statement of Net Assets in Liquidation as of December 31, 2006 and 2005
    
    F-3Statement of Changes in Net Assets in Liquidation at December 31,
2006 and the period from July 1, 2005 to December 31, 2005
    
    F-4Statements of Operations for the six months ended June 30, 2005 and
for the year ended December 31, 2004 and
    
    F-5Statements of Partners Capital (Deficit) for the six months ended
June 30, 2005 and for the year ended December 31, 2004
    
    F-6Statements of Cash Flows for the six months ended June 30, 2005 and for the
year ended December 31, 2004
    
    F-7Notes to Financial Statements
    
    F-9Supplemental Schedules
    
    F-21(a) (2)
    
    Schedules.Changes in Allowance for doubtful accounts(a) (3)
    
    Exhibits.* 3.1 Certificate of Limited Partnership* 3.2 Agreement of Limited Partnership* Incorporated by reference from the Partnerships Registration Statement on Form S-1
(Registration No. 333-26933)(b)
    
    Reports on Form 8-K
     22




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(c)
    
    Exhibits:31.1 Rule 13a-14(a)/15d-14(a) Certifications by the Principal Executive Officer31.2 Rule 13a-14(a)/15d-14(a) Certifications by the Principal Financial Officer32 Section 1350 Certifications by the Principal Executive Officer and Principal
Financial Officer
 
 SIGNATURES
  COMMONWEALTH INCOME & GROWTH FUND IBy:
    
    COMMONWEALTH INCOME & GROWTH FUND, INC., General PartnerBy:
    
    /s/ Kimberly A. Springsteen

Kimberly A. Springsteen, Chief Executive Officer
  SIGNATURE
    
CAPACITY/s/ Kimberly A. Springsteen
 Kimberly
A. Springsteen
    
    Chairman, Chief Executive Officer,
Commonwealth Income & Growth Fund, Inc./s/ Henry J. Abbott
 Henry
J. Abbott
    
    Director, President,
Commonwealth Income & Growth Fund,Inc.
 23




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Commonwealth Income & Growth Fund I
 Years Ended December 31, 2006, 2005, and 2004




---



##### Table of Contents



Commonwealth Income & Growth Fund I
 Financial Statements   Years Ended December 31, 2006, 2005 and 2004




---



##### Table of Contents



Commonwealth Income & Growth Fund I
 Contents
 Report of Independent Registered Public Accounting Firm
    
    
    F-1Financial statementsThis page
not used
    
    
    F-2Statement of net assets in liquidation
    
    
    F-3Statement of changes in net assets in liquidation
    
    
    F-4Statements of operations
    
    
    F-5Statements of partners capital (deficit)
    
    
    F-6Statements of cash flows
    
    
    F-7Notes to financial statements
    
    
    F-9Supplemental SchedulesAllowance for doubtful accounts
    
    
    F-21




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
        F-1




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##### Table of Contents



Commonwealth Income & Growth Fund I
 
 Statement of Net Assets in Liquidation
 December 31,
    
    2006
    
    2005AssetsCash and cash equivalents
    
    $
    
    
    
    $
    33,503Lease income receivable, net of reserves of $7,590
as of December 31, 2005
    
    
    
    
    
    
    16,490Net investment in direct financing lease
    
    
    
    
    
    
    4,51754,510Computer equipment, at cost
    
    
    
    
    
    
    1,143,445Accumulated depreciation
    
    
    
    
    
    
    (1,139,743
    )
    
    
    
    3,702Equipment acquisition costs and deferred expenses, net
    
    
    
    
    
    
    11Total Assets
    
    
    
    
    
    $
    58,223Liabilities and Net AssetsLiabilitiesAccounts payable
    
    
    
    
    
    $
    13,430Accounts payable  Affiliated limited partnerships
    
    
    
    
    
    
    16,726Accounts payable  General Partner
    
    
    
    
    
    
    3,769Accounts payable  Commonwealth Capital Corp.
    
    
    
    
    
    
    9,613Unearned lease income
    
    
    
    
    
    
    8,779Notes payable
    
    
    
    
    
    
    5,906Total Liabilities
    
    
    
    
    
    
    58,223Net Assets in liquidation
    
    $
    
    
    
    $
    Net Assets in liquidation per equivalent limited
partnership unit
    
    $
    
    
    
    $
    Weighted average number of equivalent
limited partnership units outstanding during the year
    
    
    
    
    
    
    631,124
 See
accompanying notes to financial statements.
 F-3




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Commonwealth Income & Growth Fund I
 
 Statement of
changes in net assets in liquidation
 July 1, 2005 toDecember 31,
    
    December 31,2006
    
    2005Net Assets in liquidation  beginning
    
    $
    
    
    
    $
    (7,000
    )Lease income
    
    
    26,049
    
    
    
    27,334Interest and other
    
    
    5,513
    
    
    
    1,333Gain on sale of computer equipment
    
    
    9,027
    
    
    
    68Operating, excluding depreciation
    
    
    (30,270
    )
    
    
    (24,047
    )Interest
    
    
    (112
    )
    
    
    (301
    )Depreciation and amortization
    
    
    (3,088
    )
    
    
    (40,532
    )Bad debt
    
    
    7,590
    
    
    
    (7,590
    )Loss on sale of computer equipment
    
    
    
    
    
    
    (4,339
    )Distributions to Investors
    
    
    (50,000
    )
    
    
    (31,557
    )Contributions from CCC
    
    
    35,291
    
    
    
    86,631Changes in estimated liquidation values
of assets and liabilities
    
    
    
    
    
    
    7,000Net Assets in liquidation  ending
    
    $
    
    
    
    $
    
 See accompanying notes to financial statements.
 F-4




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Commonwealth Income & Growth Fund I
 
 Statements
of Operations
 Period ended
    
    Year endedJune 30, 2005
    
    December 31, 2004IncomeLease
    
    $
    47,452
    
    
    $
    258,552Interest and other
    
    
    4,612
    
    
    
    75,977Gain on sale of computer equipment
    
    
    12,636
    
    
    
    Total income
    
    
    64,700
    
    
    
    334,529ExpensesOperating, excluding depreciation
    
    
    56,714
    
    
    
    40,501Equipment management fee, General Partner
    
    
    
    
    
    
    2,302Interest
    
    
    483
    
    
    
    5,817Depreciation
    
    
    79,139
    
    
    
    227,137Amortization of equipment acquisition costs, and
deferred expenses
    
    
    89
    
    
    
    8,600Provision for uncollectible lease income receivable
    
    
    75,493
    
    
    
    174,000Loss on sale of equipment
    
    
    
    
    
    
    12,651Total expenses
    
    
    211,918
    
    
    
    471,008Net loss
    
    $
    (147,218
    )
    
    $
    (136,479
    )Net loss allocated to limited partners
    
    
    (147,218
    )
    
    
    (136,479
    )Net loss per equivalent limited partnership unit
    
    $
    (.23
    )
    
    $
    (.22
    )Weighted average number of equivalent
limited partnership units outstanding during the period
    
    
    631,124
    
    
    
    631,124
 See accompanying notes to financial statements.
 F-5




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Commonwealth Income & Growth Fund I
 
 Statements
of Partners Capital (Deficit)
 General
    
    LimitedPartner
    
    Partner
    
    General
    
    LimitedUnits
    
    Units
    
    Partner
    
    Partners
    
    TotalBalance,January 1, 2004
    
    
    50
    
    
    
    631,124
    
    
    
    1,000
    
    
    
    85,573
    
    
    
    86,573Net (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (136,479
    )
    
    
    (136,479
    )Balance,December 31, 2004
    
    
    50
    
    
    
    631,124
    
    
    
    1,000
    
    
    
    (50,906
    )
    
    
    (49,906
    )Contributions  Forgiveness
of fees
    
    
    
    
    
    
    
    
    
    
    190,124
    
    
    
    
    
    
    
    190,124Transfer of Partners Capital
    
    
    
    
    
    
    
    
    
    
    (190,124
    )
    
    
    190,124
    
    
    
    Net (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (147,218
    )
    
    
    (147,218
    )Balance,June 30, 2005
    
    
    50
    
    
    
    631,124
    
    
    $
    1,000
    
    
    $
    (8,000
    )
    
    $
    (7,000
    )
 See accompanying notes to financial statements.
 F-6




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Commonwealth Income & Growth Fund I
 
 Statements
of Cash Flows
 Period ended
    
    Year endedJune 30,
    
    December 31,2005
    
    2004Cash flows from operating activitiesNet loss
    
    $
    (147,218
    )
    
    $
    (136,479
    )Adjustments to reconcile net loss to net
cash provided by operating activitiesDepreciation and amortization
    
    
    79,228
    
    
    
    235,738(Gain) Loss on sale of computer
equipment
    
    
    (12,636
    )
    
    
    12,651Provision for uncollectible lease income
receivable
    
    
    75,493
    
    
    
    174,000Other noncash activities included in
determination of net loss
    
    
    (1,018
    )
    
    
    (142,151
    )Changes in assets and liabilitiesLease income receivable
    
    
    2,455
    
    
    
    (18,732
    )Other receivables
    
    
    298
    
    
    
    200Accounts payable
    
    
    11,659
    
    
    
    6,523Accounts payable, General
Partner
    
    
    
    
    
    
    (31,916
    )Accounts payable,
Commonwealth Capital Corp.
    
    
    17,659
    
    
    
    (18,334
    )Accounts payable,
affiliated limited partnerships
    
    
    (5,005
    )
    
    
    (52,865
    )Unearned lease income
    
    
    (10,732
    )
    
    
    (786
    )Net cash provided by operating activities
    
    
    10,183
    
    
    
    27,849
 F-7




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Statements
of Cash Flows
 Period ended
    
    Year endedJune 30,
    
    December 31,2005
    
    2004Cash flows from investing activitiesCapital expenditures
    
    $
    
    
    
    $
    Net proceeds from sale of computer
equipment
    
    
    23,795
    
    
    
    16,989Equipment acquisition fees to the General
Partner
    
    
    
    
    
    
    Net cash provided by investing activities
    
    
    23,795
    
    
    
    16,989Cash flows from financing activitiesProceeds from notes payable
    
    
    
    
    
    
    Debt placement fee to the General
Partner
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    
    
    
    
    Net increase in cash and cash equivalents
    
    
    33,978
    
    
    
    44,837Cash and cash equivalents at beginning of
period
    
    
    46,246
    
    
    
    1,409Cash and cash equivalents at end of period
    
    $
    80,224
    
    
    $
    46,246
 See
accompanying notes to financial statements.
 F-8




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##### Table of Contents



Commonwealth Income & Growth Fund I
 
 Notes to Financial Statements
 1. Business
    
    Commonwealth Income & Growth Fund I (the Partnership) was a limited partnership
organized in the Commonwealth of Pennsylvania to acquire, own and lease various types of
computer peripheral equipment and other similar capital equipment, which will be leased
primarily to U.S. corporations and institutions. Commonwealth Capital Corp (CCC), on
behalf of the Partnership and other affiliated partnerships, acquires computer equipment
subject to associated debt obligations and lease agreements and allocates a participation
in the cost, debt and lease revenue to the various partnerships based on certain risk
factors. The Partnerships General Partner is Commonwealth Income & Growth Fund, Inc.
(the General Partner), a Pennsylvania corporation which is an indirect wholly owned
subsidiary of Commonwealth Capital Corp.Allocations of income and distributions of cash are based on the Partnerships Limited
Partnership Agreement (the Agreement). The various allocations under the Agreement
prevent any limited partners capital account from being reduced below zero and ensure
the capital accounts reflect the anticipated sharing ratios of cash distributions, as
defined in the Agreement. During 2006 and 2005, the Partnership made distributions to
the limited partners in the amount of $49,000 and $31,000, respectively. During 2004 the
Partnership did not make any distributions to the limited partners.2. Liquidation
    
    The Board of CCC resolved on November 30, 2006 to fully liquidate the fund by December
31, 2006. The Partnership began disposing of its Equipment in July 2005. Leases in
place in July 2005 were allowed to run through maturity and expire. At December 31,
2006, nine leases were transferred to CCC. These nine leases had no book value at the
time of transfer. The Partnership was no longer conducting business as of December 31,
2006, and a final distribution in the amount of $15,000 was made on December 29, 2006.
 F-9




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
 3.
Summary of 
    Significant Accounting
    Policies
    
    Revenue Recognition
Through December 31, 2006, the Partnerships leasing
operations consisted substantially of operating leases and one direct financing lease. Operating lease revenue is
recognized on a monthly basis in accordance with the terms of the lease agreement.
Unearned revenue from direct financing agreements is amortized to revenue over the lease
term.The Partnership reviews a customers credit history before extending credit and
establishes a provision for uncollectible accounts receivable based upon the credit risk
of specific customers, historical trends and other information.Use of EstimatesThe preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.Fair Value of Financial InstrumentsStatement of Financial Accounting Standards (SFAS) No.107, Disclosures about Fair Value
of Financial Instruments, requires disclosure of the fair value of certain instruments.
The carrying values of cash, receivables and payables approximate fair value due to the
short term maturity of these instruments. For debt, the carrying amounts approximate
fair value because the interest rates approximate current market rates.Long-Lived AssetsThe Partnership evaluates its long-lived assets when events or circumstances indicate
that the value of the asset may not be recoverable. The Partnership determines whether
impairment exists by estimating the undiscounted cash flows to be generated by each
asset. If the estimated undiscounted cash flows are less than the carrying value of the
asset then impairment exists. The amount of the impairment is determined based on the
difference
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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
 between the carrying value and the fair value. Fair value is determined based
on estimated discounted cash flows to be generated by the asset. The Partnership
determined that no impairment existed in 2006 and 2005. In 2004, the Partnership
determined that the carrying amount of certain assets was greater than the undiscounted
cash flows to be generated by these assets. The Partnership recorded charges of $12,000
in the fourth quarter of 2004, to record the assets at their estimated fair value. This
amount was included in depreciation expense in the accompanying financial statements.Depreciation on computer equipment for financial statement purposes is based on the
straight-line method over estimated useful lives of four years.Intangible AssetsEquipment acquisition costs and deferred expenses are amortized on a straight-line basis
over two- to-four year lives. Unamortized acquisition fees and deferred expenses are
charged to amortization expense when the associated leased equipment is sold.Cash and Cash EquivalentsThe Partnership considers all highly liquid investments with a maturity of three months
or less to be cash equivalents. Cash equivalents have been invested in a money market
fund investing directly in Treasury obligations. Cash at December 31, 2005 was held in
the custody of one financial institution. The balance, at times, may exceed federally
insured limits. The Partnership mitigates this risk by depositing funds with a major
financial institution. The Partnership has not experienced any losses in such accounts,
and believes it is not exposed to any significant credit risk.Accounts ReceivableAccounts receivable includes current accounts receivable, net of allowances and other
accruals. The Partnership regularly reviews the collectability of its receivables and
the credit worthiness of its customers and adjusts its allowance for doubtful accounts
accordingly.
 F-11




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
 Income TaxesThe Partnership is not subject to federal income taxes; instead, any taxable income
(loss) is passed through to the partners and included on their respective income tax
returns.Taxable income differs from financial statement net income as a result of reporting
certain income and expense items for tax purposes in periods other than those used for
financial statement purposes, principally relating to depreciation, amortization, and
lease income.Net Assets in Liquidation per Equivalent Limited Partnership UnitIn connection with the conversion from the going-concern basis of accounting to the
liquidation basis, the net assets in liquidation per equivalent limited partnership unit
is computed based upon net assets in liquidation allocated to the limited partners and
the weighted average number of equivalent limited partner units outstanding during the
period.Net Income (Loss) Per Equivalent Limited Partnership UnitThe net income (loss) per equivalent limited partnership unit is computed based upon net
income (loss) allocated to the limited partners and the weighted average number of
equivalent limited partner units outstanding during the year.Reimbursable ExpensesReimbursable expenses, which are charged to the Partnership by CCC in connection with the
administration and operation of the Partnership, are allocated to the Partnership based
upon several factors including, but not limited to, the number of investors, compliance
issues, and the number of existing leases.
 F-12




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
 Forgiveness of Related Party PayablesIn accordance with Accounting Principles Board Opinion No. 26, Early Extinguishment of
Debt, the Partnership accounts for forgiveness of related party payables as partners
capital transactions.Recent Accounting PronouncementsIn September 2006, the Securities and Exchange Commission staff issued Staff Accounting
Bulletin (SAB) 108, Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements (SAB 108). SAB 108 was
issued to provide consistency between how registrants quantify financial statement
misstatements. SAB 108 established an approach that requires quantification of financial
statement misstatements based on the effects of the misstatement on each of a
registrants financial statements and the related financial statement disclosures. The
SEC staff believes that both a balance sheet and an income statement approach should be
employed by the registrant to quantify errors and evaluate if either approach results in
quantifying a material misstatement. The effective date for SAB 108 is the first annual
period ending after November 15, 2006. This bulletin was implemented by the Partnership
for the year ended December 31, 2006 and did not have an impact on the financial
statements.
 F-13




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
 4.
Net Investment in     Direct Financing
Leases
    
    The following lists the components of the net investment in a direct financing lease as
of December 31, 2006 and 2005:
 December 31,
    
    2006
    
    
    2005Minimum lease payments receivable
    
    $
    
    
    
    $
    6,018Less: Unearned Revenue
    
    
    
    
    
    
    1,501Net investment in direct financing lease
    
    $
    
    
    
    $
    4,517
 5. Computer Equipment
    
    The Partnership was the lessor of equipment under operating leases with periods ranging
from 12 to 36 months. In general, associated costs such as repairs and maintenance,
insurance and property taxes are paid by the lessee.The Partnership participates in
leases that are shared with other affiliated Partnerships. The Partnerships share of the
computer equipment in which they participate at December 31, 2006 and 2005 was
approximately $0 and $326,000, respectively, which was included in the Partnerships
fixed assets on their balance sheet. The total cost of the equipment shared by the
Partnership with other affiliated partnerships at December 31, 2006 and 2005 was
approximately $0 and $1,432,000, respectively. There was no outstanding debt at December
31, 2006 and 2005 related to the equipment shared by the Partnership.6.
Significant
    
    Lessees exceeding 10% of lease income for the years ended:Customers
 Lessee
    
    2006
    
    
    2005
    
    
    2004Lessee A
    
    
    
    
    
    
    
    
    
    
    33
    %Lessee B
    
    
    16
    %
    
    
    41
    %
    
    
    23
    %Lessee C
    
    
    16
    %
    
    
    25
    %
    
    
    12
    %Lessee D
    
    
    14
    %
    
    
    
    
    
    
    Lessee E
    
    
    17
    %
    
    
    15
    %
    
    
    Lessee F
    
    
    30
    %
    
    
    10
    %
    
    
    Total % of Lease Income
    
    
    93
    %
    
    
    91
    %
    
    
    68
    %
 F-14




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
  Lessee
    
    2006
    
    
    2005Lessee A
    
    
    
    
    
    
    36
    %Lessee B
    
    
    
    
    
    
    55
    %Total % of Accounts Receivable
    
    
    0
    %
    
    
    91
    %
 7. Related Party
Transactions
    
    Reimbursable ExpensesThe General Partner and its affiliates are entitled
to reimbursement by the Partnership for the cost of
supplies and services obtained and used by the
General Partner in connection with the
administration and operation of the Partnership
from third parties unaffiliated with the General
Partner. In addition, the General Partner and its
affiliates are entitled to reimbursement for
certain expenses incurred by the General Partner
and its affiliates in connection with the
administration and operation of the Partnership.
During 2006, 2005, and 2004, the Partnership
recorded $20,000, $18,000, $22,000, respectively,
for reimbursement of expenses to the General
Partner. The amount due to CCC at December 31,
2005 for reimburseable expenses was approximately
$10,000. No amounts were due to CCC at December
31, 2006.Equipment Acquisition FeeThe General Partner is entitled to be paid an
equipment acquisition fee of 4% of the purchase
price of each item of equipment purchased as
compensation for the negotiation of the acquisition
of the equipment and lease thereof or sale under a
conditional sales contract. No equipment
acquisition fees were earned by the General Partner
in 2006, 2005 and 2004.Debt Placement FeeAs compensation for arranging term debt to finance
the acquisition of equipment by the Partnership,
the General Partner is paid a fee equal to 1% of
such indebtedness; provided, however, that such fee
shall be reduced to the extent the Partnership
incurs such fees to third parties, unaffiliated
with the General Partner or the lender, with
respect to such indebtedness and no such fee will
be paid with respect to borrowings from the General
Partner or its affiliates. No debt placement fees
were earned by the General Partner in 2006, 2005
and 2004.
 F-15




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
 Equipment Management FeeThe General Partner is entitled to be paid a
monthly fee equal to the lesser of (i) the fees
which would be charged by an independent third
party for similar services for similar equipment or
(ii) the sum of (a) two percent of (1) the gross
lease revenues attributable to equipment which is
subject to full payout net leases which contain net
lease provisions plus (2) the purchase price paid
on conditional sales contracts as received by the
Partnership and (b) 5% of the gross lease revenues
attributable to equipment which is subject to
operating and capital leases. No equipment
management fees were earned by the General Partner
in 2006 and 2005. During 2004, equipment
management fees of approximately $2,000 were earned
by the General Partner as determined pursuant to
section (ii) above.Release FeeAs compensation for providing releasing services
for any equipment for which the General Partner
has, following the expiration of, or default under,
the most recent lease or conditional sales
contract, arranged a subsequent lease or
conditional sales contract for the use of such
equipment to a lessee or other party, other than
the current or most recent lessee or other operator
of such equipment or its affiliates (Release),
the General Partner shall receive, on a monthly
basis, a Release Fee equal to the lesser of (a) the
fees which would be charged by an independent third
party for comparable services for comparable
equipment or (b) two percent of gross lease
revenues derived from such Release. There were no
such fees earned by the General Partner in 2006,
2005, and 2004.
 F-16




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
 Equipment Liquidation FeeWith respect to each item of equipment sold by the
General Partner (other than in connection with a
conditional sales contract), a fee equal to the
lesser of (i) 50% of the competitive equipment sale
commission or (ii) three percent of the sales price
for such equipment is payable to the General
Partner. The payment of such fee is subordinated
to the receipt by the limited partners of the net
disposition proceeds from such sale in accordance
with the Partnership Agreement. Such fee will be
reduced to the extent any liquidation or resale
fees are paid to unaffiliated parties. During
2006, 2005 and 2004, equipment liquidation fees of
approximately $0, $1,000, and $500, respectively,
were earned by the General Partner.8. Notes Payable
    
    Notes payable consisted of the following:
 December 31,
    
    2006
    
    
    2005Installment note payable to a
bank; interest at 6.5%; due in
monthly installments of $1,003
including interest through June
2006.
    
    
    
    
    
    
    5,906$
    
    
    
    $
    5,906
 These notes are secured by specific computer
equipment and are nonrecourse liabilities of the
Partnership.
 F-17




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
 9. Supplemental
Cash Flow Information
    
    Other noncash activities included in the
determination of net loss are as follows:
 Period ended
    
    Year endedJune 30, 2005
    
    December 31, 2004Lease income, net of interest expense on
notes payable realized as a
result of direct payment of
principal by lessee to bank
    
    $ 1,018
    
    $
    145,654
  10.
    
    Reconciliation of Net Income (Loss) Reported for Financial
Reporting Purposes to Taxable (Loss) on the Federal
Partnership Return
 Year ended December 31,
    
    2006
    
    
    2005
    
    
    2004Net income (loss) for financial reporting purposes
    
    $
    14,708
    
    
    $
    (195,293
    )
    
    $
    (136,479
    )AdjustmentsLoss on sale of computer equipment
    
    
    (40,648
    )
    
    
    (33,953
    )
    
    
    (5,317
    )Depreciation
    
    
    (35,983
    )
    
    
    41,365
    
    
    
    89,947Amortization
    
    
    11
    
    
    
    122
    
    
    
    7,200Bad debt expense
    
    
    
    
    
    
    (253,649
    )
    
    
    Unearned lease income
    
    
    (1,057
    )
    
    
    (2,748
    )
    
    
    (3,788
    )Other
    
    
    (8,160
    )
    
    
    16,244
    
    
    
    (14,574
    )Taxable (loss) on the Federal Partnership return
    
    $
    (71,129
    )
    
    $
    (427,912
    )
    
    $
    (63,011
    )
   F-18




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
 11. Quarterly Results
of Operation
(Unaudited)
    
    Summarized quarterly financial data for the
years ended December 31, 2006 and 2005 is as
follows:
 Quarter endedMarch 31*
    
    
    June 30*
    
    
    September 30*
    
    
    December 31*2006RevenuesLease and other
    
    $
    11,015
    
    
    $
    13,590
    
    
    $
    9,375
    
    
    $
    5,172Gain on sale of
computer
equipment
    
    
    1,375
    
    
    
    616
    
    
    
    7,036
    
    
    
    Total revenues
    
    
    12,390
    
    
    
    14,206
    
    
    
    16,411
    
    
    
    5,172Costs and expenses
    
    
    11,162
    
    
    
    14,867
    
    
    
    5,439
    
    
    
    2,002Net income (loss) income
    
    $
    1,228
    
    
    $
    (661
    )
    
    $
    10,971
    
    
    $
    3,170Income (loss) per
limited partner unit
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Net Assets in
liquidation per limited
partner unit
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  F-19




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##### Table of Contents



Commonwealth Income & Growth Fund I
 Notes to Financial Statements
 Quarter endedMarch 31
    
    
    June 30
    
    
    September 30*
    
    
    December 31*2005RevenuesLease and other
    
    $
    23,056
    
    
    $
    29,007
    
    
    $
    16,973
    
    
    $
    11,694Gain (loss) on
sale of
computer
equipment
    
    
    
    
    
    
    13,116
    
    
    
    (4,339
    )
    
    
    68
    )Total revenues
    
    
    23,056
    
    
    
    42,173
    
    
    
    12,634
    
    
    
    11,762Costs and expenses
    
    
    76,716
    
    
    
    135,731
    
    
    
    42,834
    
    
    
    29,636Net (loss) income
    
    $
    (53,660
    )
    
    $
    (93,558
    )
    
    $
    (30,200
    )
    
    $
    (17,874
    )(Loss) income per
limited partner unit
    
    $
    (.09
    )
    
    $
    (.15
    )
    
    $
    
    
    
    $
    Net Assets in
liquidation per
limited partner unit
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
   F-20




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##### Table of Contents



Commonwealth Income & Growth Fund I
 
 Supplemental Schedules
 Balance,
    
    
    Additionsbeginning
    
    
    charged to
    
    
    
    
    
    
    Balance,of period
    
    
    operations
    
    
    Deductions
    
    
    end of periodAllowance for doubtful accounts:Year ended December 31, 2004
    
    $
    299,578
    
    
    $
    174,000
    
    
    $
    
    
    
    $
    473,578Six months ended June
30, 2005
    
    
    473,578
    
    
    
    75,493
    
    
    
    
    
    
    
    549,071Six month period July 1,
2005 to December 31, 2005
    
    
    549,071
    
    
    
    7,590
    
    
    
    549,071
    
    
    
    7,590Year ended December 31,
2006
    
    $
    7,590
    
    
    $
    
    
    
    $
    7,590
    
    
    $
    
 F-21