<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K

(X) 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, 1998

( ) 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
             (Exact name of registrant as specified in its charter)

         Pennsylvania                                   23-2735641
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

                            1160 West Swedesford Road
                           Berwyn, Pennsylvania 19312
          (Address, including zip code, of principal executive offices)

                                 (610) 647-6800
               (Registrant's telephone number including area code)

         Indicate by check mark whether the registrant (i) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (ii) has been subject to such filing
requirements for the past 90 days: YES [X] NO [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, to the best of Registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.
YES [X] NO [ ]

                       DOCUMENTS INCORPORATED BY REFERENCE
(Specific sections incorporated are identified under applicable items herein)

         Certain exhibits to the Company's Registration Statement on Form S-1
(File No. 33-69996) and Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 are incorporated by reference as Exhibits in Part IV of this
Report.


<PAGE>


PART I

ITEM 1:           BUSINESS

GENERAL

         Commonwealth Income and Growth Fund I (the "Partnership") was formed
on August 26, 1993 under the Pennsylvania Revised Uniform Limited Partnership
Act. The Partnership began offering $15,000,000 of Units of Limited Partnership
("Units") to the public on December 17, 1993 (the "Offerings"). The Partnership
terminated its offering of Units on May 11, 1995, with 631,358 Units
($12,623,682) admitted as Limited Partners of the Partnership.

         See "The Glossary" below for the definition of capitalized terms not
otherwise defined in the text of this report.

PRINCIPAL INVESTMENT OBJECTIVES

         The Partnership was formed for the purpose of acquiring various types
of Equipment, including computer peripheral and other similar capital equipment.
The Partnership utilized the net proceeds of the Offering to purchase IBM and
IBM compatible computer peripheral and other similar capital equipment. The
Partnership utilizes Retained Proceeds and debt financing (not to exceed 30% of
the aggregate cost of the Equipment owned or subject to Conditional Sales
Contract by the Partnership at the time the debt is incurred) to purchase
additional Equipment. The Partnership acquires Equipment which is subject to
lease principally to U.S. corporations and other institutions pursuant
predominantly to Operating Leases. The Partnership retains the flexibility to
enter into Full Payout Net Leases and Conditional Sales Contracts, but has not
done so.

         The Partnership's principal investment objectives are to;

          (a)  acquire, lease and sell Equipment to generate revenues from
          operations sufficient to provide quarterly cash distributions to
          Limited Partners;

          (b)  preserve and protect Limited Partners' capital;

          (c)  use a portion of Cash Flow and Net Disposition Proceeds derived
          from the sale, refinancing or other disposition of Equipment to
          purchase additional Equipment; and

          (d)  refinance, sell or otherwise dispose of Equipment in a manner
          that will maximize the proceeds to the Partnership.

THERE CAN BE NO ASSURANCE THAT ANY OF THESE OBJECTIVES WILL BE ATTAINED.

         Limited Partners do not have the right to vote on or otherwise approve
or disapprove any particular investment to be made by the Partnership.

         Although the Partnership has acquired predominately new Equipment, the
Partnership may purchase used Equipment. Generally, Equipment is acquired from
manufacturers, distributors, leasing companies, agents, owner-users,
owner-lessors, and other suppliers upon terms that vary depending upon the
Equipment and supplier involved. Manufacturers and distributors usually furnish
a limited warranty against defects in material and workmanship and some purchase
agreements for Equipment provide for service and replacement of parts during a
limited period. Equipment purchases are also made through lease brokers and on
an ad hoc basis to meet the needs of a particular lessee.

<PAGE>

         As of December 31, 1998, all Equipment purchased by the Partnership is
subject to an Operating Lease or an Operating Lease was entered into with a
third party when the Partnership acquired an item of Equipment. The Partnership
may also engage in sale/leaseback transactions, pursuant to which the
Partnership would purchase Equipment from companies that would then immediately
lease the Equipment from the Partnership. The Partnership may also purchase
Equipment which is leased under Full Payout Net Leases or sold under Conditional
Sales Contracts at the time of acquisition or the Partnership may enter into a
Full Payout Net Lease or Conditional Sales Contract with a third party when the
Partnership acquires an item of Equipment.

         The Partnership may enter into arrangements with one or more
manufacturers pursuant to which the Partnership purchases from such
manufacturers Equipment which has previously been leased directly by the
manufacturer to third parties ("vendor leasing agreements"). The Partnership and
manufacturers may agree to nonrecourse loans to the Partnership from the
manufacturers to finance the acquisition of Equipment secured by the Equipment
and the receivables due to the manufacturers from users of such Equipment. It is
expected that the manufacturers of Equipment will provide maintenance,
remarketing and other services for the Equipment subject to such agreements. As
of December 31, 1998, the Partnership has not entered into any such agreements.

         The General Partner has the discretion consistent with its fiduciary
duty to change the investment objectives of the Partnership if it determines
that such a change is in the best interest of the Limited Partners and so long
as such a change is consistent with the Partnership Agreement. The General
Partner will notify the Limited Partners if it makes such a determination to
change the Partnership's investment objectives.

TYPES OF EQUIPMENT

         COMPUTER PERIPHERAL EQUIPMENT. Computer peripheral equipment consists
of devices used to convey information into and out of a central processing unit
(or "mainframe") of a computer system, such as tape drives, disk drives, tape
controllers, disk controllers, printers, terminals and related control units,
all of which are in some way related to the process of storing, retrieving, and
processing information by computer.

         The Partnership acquires primarily IBM manufactured or IBM compatible
equipment. The General Partner believes that dealing in IBM or IBM compatible
equipment is particularly advantageous because of the large IBM customer base,
policy of supporting users with software and maintenance services and the large
amount of IBM and IBM compatible equipment in the marketplace.

         Computer technology has developed rapidly in recent years and is
expected to continue to do so. Technological advances have permitted continued
reductions in the cost of computer processing capacity, thereby permitting
applications not economically feasible a few years ago. Much of the older IBM
and IBM compatible computer peripheral equipment has not been retired from
service, because software is generally interchangeable between older and newer
equipment, and older equipment is capable of performing many of the same
functions as newer equipment. The General Partner believes that historically
values of peripheral equipment have been affected less dramatically by changes
in technology than have the values of central processing units. An equipment
user who upgrades to a more advanced central processor generally can continue to
use his existing peripheral equipment. Peripheral equipment nevertheless is
subject to declines in value as new, improved models are developed and become
available. Technological advances and other factors, including Year 2000 Issues
discussed below in Management Discussion and Analysis, have at times caused
dramatic reduction in the market prices of older models of IBM and IBM
compatible computer peripheral equipment from the prices at which they were
originally introduced.

         OTHER EQUIPMENT-RESTRICTIONS. The Partnership acquires computer
peripheral equipment, such as tape drives, disk drives, tape controllers, disk
controllers, printers, terminals and related control units, all 


<PAGE>

of which are in some way related to the process of storing, retrieving and
processing information by computer. The General Partner is also authorized, but
does not presently intend, to cause the Partnership to invest in non IBM
compatible computer peripheral, data processing, telecommunication or medical
technology equipment. The Partnership may not invest in any of such other types
of Equipment (i) to the extent that the purchase price of such Equipment,
together with the aggregate Purchase Price of all such other types of Equipment
then owned by the Partnership, is in excess of 25% of the total cost of all of
the assets of the Partnership at the time of the Partnership's commitment to
invest therein and (ii) unless the General Partner determines that such purchase
is in the best economic interest of the Partnership at the time of the purchase
and, in the case of non-IBM compatible peripheral Equipment, that such Equipment
is comparable in quality to similar IBM or IBM compatible Equipment. There can
be no assurance that any Equipment investments can be found which meet this
standard. Accordingly, there can be no assurance that investments of this type
will be made by the Partnership.

DIVERSIFICATION

         Diversification is generally desirable to minimize the effects of
changes in specific industries, local economic conditions or similar risks.
However, the extent of the Partnership's diversification, in the aggregate and
within each category of Equipment, depends in part upon the financing which can
be assumed by the Partnership or borrowed from third parties on satisfactory
terms. The Partnership's policy not to borrow on a recourse basis will further
limit its financing options. Diversification also depends on the availability of
various types of Equipment. As of December 31, 1998, the Partnership has
acquired a diversified Equipment portfolio which it has leased to 22 different
companies located throughout the United States. Approximately 42% of the
Equipment acquired by the Partnership consists of tape storage Approximately 28%
of the Equipment acquired by the Partnership consist of workstations, department
servers and enterprise servers. Approximately 13% of the Equipment acquired by
the Partnership consist of printers. Approximately 10% of the Equipment acquired
by the Partnership consists of communication controllers. Approximately 5% of
the Equipment acquired by the Partnership consists of escon drivers.
Approximately another 2% of the Equipment acquired by the Partnership consists
of more traditional forms of disk storage.

         During the operational stage of the Partnership, the Partnership may
not at any one point in time lease (or sell pursuant to a Conditional Sales
Contract) more than 25% of the Equipment to a single Person or Affiliated group
of Persons.

DESCRIPTION OF LEASES

         The Partnership to date has purchased, and in the future intends to
continue to purchase only Equipment that is subject to a lease or for which a
lease or similar agreement will be entered into contemporaneously with the
consummation of the Partnership's acquisition of the Equipment. The General
Partner to date has leased and in the future intends to lease most of the
Equipment purchased by the Partnership to third parties pursuant to Operating
Leases. Operating Leases are relatively short-term (12 to 48 month) leases under
which the aggregate noncancellable rental payments during the original term of
the lease are not sufficient to permit the lessor to recover the purchase price
of the subject Equipment. The Equipment may also be leased pursuant to Full
Payout Net Leases. Full Payout Net Leases are leases under which the aggregate
noncancellable rental payments during the original term of the lease are at
least sufficient to recover the purchase price of the subject Equipment. It is
anticipated that the Partnership will enter into few, if any, Full Payout net
Leases. The General Partner may also enter into Conditional Sales Contracts for
Equipment. A Conditional Sales Contract generally provides that the
noncancellable payments to the seller over the term of the contract are
sufficient to recover the investment in such Equipment and to provide a return
on such investment. Under a Conditional Sales Contract, the seller reserves
title to, and retains a security interest in, the Equipment until the Purchase
Price of the Equipment is paid. As of December 31, 1998, the Partnership has not
entered into any Full Payout Net Leases or Conditional Sales Contracts for
Equipment and does not presently intend to do so.


<PAGE>

         In general, the terms of the Partnership's leases, whether the
Equipment is leased pursuant to an Operating lease or a Full Payout Net Lease,
depend upon a variety of factors, including: the desirability of each type of
lease from both an investment and a tax point of view; the relative demand among
lessees for Operating or Full Payout Net Leases; the type and use of Equipment
and its anticipated residual value; the business of the lessee and its credit
rating; the availability and cost of financing; regulatory considerations; the
accounting treatment of the lease sought by the lessee or the Partnership; and
competitive factors.

         An Operating Lease generally represents a greater risk to the
Partnership than a Full Payout Net Lease, because in order to recover the
purchase price of the subject Equipment and earn a return on such investment, it
is necessary to renew or extend the Operating Lease, lease the Equipment to a
third party at the end of the original lease term, or sell the Equipment. On the
other hand, the term of an Operating Lease is generally much shorter than the
term of a Full Payout Net Lease, and the lessor is thus afforded an opportunity
under an Operating Lease to re-lease or sell the subject Equipment at an earlier
stage of the Equipment's life cycle than under a Full Payout Net Lease. Also,
the annual rental payments received under an Operating Lease are ordinarily
higher than those received under a Full Payout Net Lease.

         The Partnership's policy is to generally enter into "triple net leases"
(or the equivalent, in the case of a Conditional Sales Contract) which typically
provide that the lessee or some other party bear the risk of physical loss of
the Equipment; pay taxes relating to the lease or use of the Equipment; maintain
the Equipment; indemnify the Partnership-lessor against any liability suffered
by the Partnership as the result of any act or omission of the lessee or its
agents; maintain casualty insurance in an amount equal to the greater of the
full value of the Equipment and a specified amount set forth in the lease; and
maintain liability insurance naming the Partnership as an additional insured
with a minimum coverage which the General Partner deems appropriate. In
addition, the Partnership may purchase "umbrella" insurance policies to cover
excess liability and casualty losses, to the extent deemed practicable and
advisable by the General Partner. As of December 31, 1998, all leases that have
been entered into are "triple net leases".

         The General Partner has not established any standards for lessees to
which it will lease Equipment and, as a result, there is not an investment
restriction prohibiting the Partnership from doing business with any lessees.
However, a credit analysis of all potential lessees is undertaken by the General
Partner to determine the lessee's ability to make payments under the proposed
lease. The General Partner may refuse to enter into an agreement with a
potential lessee based on the outcome of the credit analysis.

         The terms and conditions of the Partnership's leases, or Conditional
Sales Contracts, are each determined by negotiation and may impose substantial
obligations upon the Partnership. Where the Partnership assumes maintenance or
service obligations, the General Partner generally causes the Partnership to
enter into separate maintenance or service agreements with manufacturers or
certified maintenance organizations to provide such services. Such agreements
generally require annual or more frequent adjustment of service fees. As of
December 31, 1998, the Partnership has not entered into any such agreements.

BORROWING POLICIES

         The General Partner, at its discretion, may cause the Partnership to
incur debt in the maximum aggregate amount of 30% of the aggregate cost of the
Equipment owned, or subject to Conditional Sales Contract, by the Partnership at
the time the debt is incurred. The Partnership incurs only non-recourse debt
which is secured by Equipment and lease income therefrom. Such leveraging
permits the Partnership to increase the aggregate amount of its depreciable
assets, and, as a result, potentially increases both its lease revenues and its
federal income tax deductions above those levels which would be achieved without
leveraging. There is no limit on the amount of debt that may be incurred in
connection with the acquisition of any single item of Equipment. Any debt
incurred is fully amortized over the term of the initial lease or Conditional
Sales Contract to which the Equipment securing the debt is subject. The precise
amount borrowed by the Partnership depends on a number of factors, including the
types of Equipment acquired by the Partnership; the creditworthiness of the
lessee; the availability of suitable financing; and prevailing 


<PAGE>

interest rates. The Partnership is flexible in the degree of leverage it
employs, within the permissible limit. There can be no assurance that credit
will be available to the Partnership in the amount or at the time desired or on
terms considered reasonable by the General Partner. As of December 31, 1998, the
aggregate nonrecourse debt outstanding of $2,401,080 was 17% of the aggregate
cost of the Equipment owned.

         The Partnership has and may continue to purchase some items of
Equipment without leverage. If the Partnership purchases an item of Equipment
without leverage and thereafter suitable financing becomes available, it may
then obtain the financing, secure the financing with the purchased Equipment to
the extent practicable and invest any proceeds from such financing in additional
items of Equipment, or it may distribute some or all of such proceeds to the
Limited Partners. Any such later financing will be on terms consistent with the
terms applicable to borrowings generally. As of December 31, 1998, the
Partnership has not exercised this option.

         To date, the General Partner has caused the Partnership to borrow funds
at fixed interest rates and plans to continue borrowing additional funds, to the
fullest extent practicable. The Partnership may borrow funds at rates which vary
with the "prime" or "base" rate. If lease revenues were fixed, a rise in the
"prime" or "base" rate would increase borrowing costs and reduce the amount of
the Partnership's income and cash available for distribution. Therefore, the
General Partner is permitted to borrow funds to purchase Equipment at
fluctuating rates only if the lease for such Equipment provides for fluctuating
rental payments calculated on a similar basis.

         Any additional debt incurred by the Partnership must be nonrecourse.
Nonrecourse debt, in the context of the business to be conducted by the
Partnership, means that the lender providing the funds can look for security
only to the Equipment pledged as security and the proceeds derived from leasing
or selling such Equipment. Neither the Partnership nor any Partner (including
the General Partner) would be liable for repayment of any nonrecourse debt.

         Loan agreements may also require that the Partnership maintain certain
reserves or compensating balances and may impose other obligations upon the
Partnership. Moreover, since a significant portion of the Partnership's revenues
from the leasing of Equipment will be reserved for repayment of debt, the use of
financing reduces the cash which might otherwise be available for distributions
until the debt has been repaid and may reduce the Partnership's Cash Flow over a
substantial portion of the Partnership's operating life. As of December 31,
1998, no such agreements existed.

         The General Partner and any of its Affiliates may, but are not required
to, make loans to the Partnership on a short-term basis. If the General Partner
or any of its Affiliates makes such a short-term loan to the Partnership, the
General Partner of Affiliate may not charge interest at a rate greater that the
interest rate charged by unrelated lenders on comparable loans for the same
purpose in the same locality. In no event is the Partnership required to pay
interest on any such loan at an annual rate greater than three percent over the
"prime rate' from time to time announced by PNC Bank, Philadelphia, Pennsylvania
("PNC Bank"). All payments of principal and interest on any financing provided
by the General Partner or any of its affiliates are due and payable by the
Partnership within 12 months after the date of the loan.

REFINANCING POLICIES

         Subject to the limitations set forth in "Borrowing Policies" above, the
Partnership may refinance its debt from time to time. With respect to a
particular item of Equipment, the General Partner will take into consideration
such factors as the amount of appreciation in value, if any, to be realized, the
possible risks of continued ownership, and the anticipated advantages to be
obtained for the Partnership, as compared to selling such Equipment. As of
December 31, 1998, the Partnership has not refinanced any of its debt.


<PAGE>

         Refinancing, if achievable, may permit the Partnership to retain an
item of Equipment and at the same time to generate additional funds for
reinvestment in additional Equipment or for distribution to the Limited
Partners.

LIQUIDATION POLICIES

         The General Partner intends to cause the Partnership to begin disposing
of its Equipment in approximately January 2004. Notwithstanding the
Partnership's objective to sell all of its assets and dissolve by December 31,
2004, the General Partner may at any time cause the Partnership to dispose of
all its Equipment and, dissolve the Partnership upon the approval of Limited
Partners holding a Majority in Interest of Units.

         Particular items of Equipment may be sold at any time if, in the
judgment of the General Partner, it is in the best interest of the Partnership
to do so. The determination of whether particular items of Partnership Equipment
should be sold or otherwise disposed of is made by the General Partner after
consideration of all relevant factors (including prevailing general economic
conditions, lessee demand, the General Partner's views of current and future
market conditions, the cash requirements of the Partnership, potential capital
appreciation, cash flow and federal income tax considerations), with a view
toward achieving the principal investment objectives of the Partnership. As
partial payment for Equipment sold, the Partnership may receive purchase money
obligations secured by liens on such Equipment. Subject to the General Partner's
discretion the Partnership may extend beyond December 31, 2004, if deemed
beneficial to the Partnership.

MANAGEMENT OF EQUIPMENT

         Equipment management services for the Partnership's Equipment is
provided by the General Partner and its Affiliates and by persons employed by
the General Partner. Such services will consist of collection of income from the
Equipment, negotiation and review of leases, Conditional Sales Contracts and
sales agreements, releasing and leasing-related services, payment of operating
expenses, periodic physical inspections and market surveys, servicing
indebtedness secured by Equipment, general supervision of lessees to assure that
they are properly utilizing and operating Equipment, providing related services
with respect to Equipment, supervising, monitoring and reviewing services
performed by others in respect to Equipment and preparing monthly Equipment
operating statements and related reports.

COMPETITION

         The equipment leasing industry is highly competitive. The Partnership
competes with leasing companies, equipment manufacturers and their affiliated
financing companies, distributors and entities similar to the Partnership
(including other programs sponsored by the General Partner), some of which have
greater financial resources than the Partnership and more experience in the
equipment leasing business than the General Partner. Other leasing companies and
equipment manufacturers, their affiliated financing companies and distributors
may be in a position to offer equipment to prospective lessees on financial
terms which are more favorable that those which the Partnership can offer. They
may also be in a position to offer trade-in privileges, software, maintenance
contracts and other services which the Partnership may not be able to offer.
Equipment manufacturers and distributors may offer to sell equipment on terms
(such as liberal financing terms and exchange privileges) which will afford
benefits to the purchaser similar to those obtained through leases. As a result
of the advantages which certain of its competitors may have, the Partnership may
find it necessary to lease its Equipment on a less favorable basis than certain
of its competitors.

         The computer peripheral equipment industry is extremely competitive.
Competitive factors include pricing, technological innovation and methods of
financing. Certain manufacturer-lessors maintain advantages through patent
protection, where applicable, and through a policy that combines service and
hardware with payment accomplished through a single periodic charge.


<PAGE>

         The dominant firm in the computer marketplace is International Business
Machines Corporation, and its subsidiary IBM Credit Corporation is the dominant
force in the leasing of IBM equipment. Because of IBM's substantial resources
and dominant position, revolutionary changes with respect to computer systems,
pricing, marketing practices, technological innovation and the availability of
new and attractive financing plans could occur at any time. Significant action
in any of these areas by IBM or IBM Credit Corporation might materially
adversely affect the Partnership's business or the other manufacturers with whom
the General Partner might negotiate purchase and other agreements. Any adverse
effect on these manufacturers could be reflected in the overall return realized
by the Partnership on equipment from those manufacturers from IBM.

INVESTMENTS

         As of March 31, 1999, the Partnership has purchased, or has made the
commitment to purchase, the following Equipment:

<TABLE>
<CAPTION>
                                            EQUIPMENT                   LIST       PURCHASE       MONTHLY    LEASE
LESSEE                              MFG     DESCRIPTION                PRICE         PRICE          RENT      TERM


<S>                              <C>        <C>                     <C>           <C>          <C>         <C>
Xerox Corp.                         SUN     (32) SUN WORK ST           440,800       277,705         286      39
Xerox Corp.                         SUN     (4)SPARC2000               590,840       305,875       1,019      39
Shared Medical Systems Corp.      STK-ICE    (25%)9200-XJ3             499,630       213,583       4,949      36
UNUM Life Insurance                 IBM     (50%) 3900 & roll          413,368       343,010       6,338      48
Fingerhut Corp.                   SIEMEN   (2) 2240-004                722,000       459,592       8,558      48
Software Maintenance Inc.           STK     (50%) 9200-XN3             949,580       236,640       5,607      36
Chrysler Corp.                      STK     (2) 4490-M30               686,158       490,110      12,001      48
GE Industrial & Power Systems       HP      (50%) HP9000/J200          202,680       157,635       4,115      36
Wang Laboratories, Inc.             PYR     (50%) NILE150              937,290       589,287      16,639      36
Shared Medical Systems Corp.        STK     (8) 9490-M34             2,126,928     1,452,140      29,191      48
Chrysler Corp.                      IBM     (20%) 3745-31A             242,244       184,383       4,203      48
Sprint Communications Company       STK     (10) 9490-M32            1,481,830       779,676      15,983      36
Sprint Communications Company       STK     (9) 9490-M32             1,335,897       703,968      15,501      36
Honda R&D                           SGI     (45%) 4XR10000             400,220       298,094       7,683      36
TRW                                 HP      (19) HP9000-C110           507,370       411,075      10,711      36
Sprint Communications Company       IBM     (2) 3995-133               421,500       286,536      10,166      24
Equitable Life Assurance Company    LEX     (80) N240                  571,351       497,477      11,501      36
Damark International                PYR     (1) 3445-1210              327,288       216,419       5,681      36
Chrysler Corp.                      STK     (50%) (7) 9490-M34         951,881       538,529      14,749      24
Chrysler Corp.                      STK     (55%) 28% tape 
                                             libraries, 30% redwd,
                                              42% timberline         1,693,479       997,891      22,520      36
McDonnell Douglas                   HP      (55%) (101) HP9000       1,662,009       932,491      34,621      22
Equitable Life Assurance Company    LEX     (16) OPTRA                  74,458        94,098       2,615      36
Kaiser                              IBM     (3) 3745-61A,
                                            (3) 3746-900             2,149,234     1,191,555      29,786      36
Litton                              SUN     (1) E3000                  251,967       148,492       3,771      36
Sprint Communications Company       SUN     (2) E5000                  371,640       246,042       7,199      30
Computer Science Corporation        SGI     (50%)144 workstations    2,055,893       822,455      21,031      36
PaineWebber                         IBM     (2) 9032-003               932,206       453,900      11,060      36
Charles Schwab                      IBM     (20%) (6) 9032-003         495,889       307,983       6,989      36
Xerox Corporation                   SUN     (5) SPARC 20               243,719       153,776       1,300      39
ADP                                 IBM     (3) 3490-A20
                                            (1) 3490-B40               579,850       379,682       5,036      69
Lucent                              SUN     (1)3000server               70,300        45,892       1,181      36
Lucent                              SUN     (1)3500server               75,750        49,505       1,274      36
Pitney Bowes                        IBM     (1)3590                    526,390       299,832       5,852      40
Cendant                             SUN     (1)6000                    512,640       274,774       6,722      36
Sprint                              SUN     Upgrade to
                                            ES5000                      21,400        14,491         602      25
</TABLE>

<PAGE>

RESERVES

         Because the Partnership's leases are on a "triple-net" basis, no
permanent reserve for maintenance and repairs will be established from the
Offering proceeds. However, the General Partner, in its sole discretion, may
retain a portion of the Cash Flow and Net Disposition Proceeds available to the
Partnership for maintenance, repairs and working capital. There are no
limitations on the amount of Cash Flow and Net Disposition Proceeds that may be
retained as reserves. Since no reserve will be established if available Cash
Flow of the Partnership is insufficient to cover the Partnership's operating
expenses and liabilities, it may be necessary for the Partnership to obtain
additional funds by refinancing its Equipment or borrowing.

GENERAL RESTRICTIONS

         Under the Partnership Agreement, the Partnership is not permitted,
among other things, to:

         (a) invest in junior trust deeds unless received in connection with the
sale of an item of Equipment in an aggregate amount which does 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 shall not be 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.

         The General Partner has also agreed in the Partnership Agreement to use
its best efforts to assure that the Partnership shall not be deemed an
"investment company" as such term is detained in the Investment Company Act of
1940.

         The General Partner and its Affiliates may engage in other activities,
whether or not competitive with the Partnership. The Partnership Agreement
provides, however, that neither the General Partner nor any of its Affiliates
may receive any rebate or "give up" in connection with the Partnership's
activities or participate in reciprocal business arrangements that circumvent
the restrictions in the Partnership Agreement against dealings with Affiliates.

EMPLOYEES

         The Partnership has no employees and received administrative and other
services from the General Partner which has 12 employees.

<PAGE>

ITEM 2:  PROPERTIES

                           NOT APPLICABLE

ITEM 3:  LEGAL PROCEEDINGS

                           NOT APPLICABLE

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                           NOT APPLICABLE



PART II



ITEM 5:  MARKET FOR THE REGISTRANTS COMMON EQUITY AND
         RELATED STOCKHOLDER MATTERS

         There is no public market for the Units nor is it anticipated that one
will develop. As of December 31, 1998, there were 683 holders of Units. The
Units are not listed on any exchange or permitted to trade on any
over-the-counter market. In addition, there are substantial restrictions on the
transferability of Units.

GENERAL LIMITATIONS

         Units cannot be transferred without the consent of the General Partner,
which may be withheld in its absolute discretion. The General Partner monitors
transfers of Units in an effort to ensure that all transfers are within certain
safe harbors promulgated by the IRS to furnish guidance regarding publicly
traded partnerships. These safe harbors limit the number of transfers that can
occur in any one year. The General Partner intends to cause the Partnership to
comply with the safe harbor that permits nonexempt transfers and redemptions of
Units of up to five percent of the total outstanding interest in the
Partnership's capital or profits in any one year.

REDEMPTION PROVISION

         Upon the conclusion of the 30 month period following the termination of
the Offering, the Partnership may, at the sole discretion of the General
Partner, repurchase a number of the outstanding Units. After such 30 month
period, on a semi-annual basis, the General Partner, at its discretion, will
establish an amount for redemption, generally not to exceed two percent of the
outstanding Units per year, subject to the General Partner's good faith
determination that such redemptions will not (a) cause the Partnership to be
taxed as a corporation under Section 7704 of the Code or (b) impair the capital
or operations of the Partnership. (The Partnership may redeem Units in excess of
the two percent limitation if, in the good faith judgment of the General
Partner, the conditions imposed in the preceding sentence would remain
satisfied.) The redemption price for Units will be 105% of the selling Limited
Partner's Adjusted Capital Contributions attributable to the Units for sale.
Following the determination of the annual redemption amount, redemptions will
occur on a semi-annual basis and all requests for redemption, which must be made
in writing, must be on file as of the Record Date in which the redemption is to
occur. The General Partner will maintain a master list of requests for
redemption with priority being given to Units owned by estates, followed by IRAs
and Qualified Plans. All other requests will be considered in the order
received. Redemption requests made by or on behalf of Limited Partners who are
not affiliated 


<PAGE>

with the General Partner or its Affiliates will be given priority over those
made by Limited Partners who are affiliated with the General Partner or its
Affiliates. All redemption request will remain in effect until and unless
canceled, in writing, by the requesting Limited Partner(s).

         The Partnership will accept redemption requests beginning 30 months
following the termination of the Offering. There will be no limitations on the
period of time that a redemption request may be pending prior to its being
granted. Limited Partners will not be required to hold their interest in the
Partnership for any specified period prior to their making a redemption request.

         In order to make a redemption request, Limited Partners will be
required to advise the General Partner in writing of such request. Upon receipt
of such notification, the Partnership will provide detailed forms and
instructions to complete the request. At December 31, 1998, the General Partner
has not redeemed any Units. Additionally, no Limited Partners have requested
redemption of their Units.

EXEMPT TRANSFERS

         The following six categories of transfers are exempt transfers for
purposes of calculating the volume limitations imposed by the IRS and will
generally be permitted by the General Partner:

         (1) transfers in which the basis of the Unit in the hands of the
transferee is determined, in whole or in part, by reference to its basis in the
hands of the transferor (for example, Units acquired by corporations in certain
reorganizations, contributions to capital, gifts of Units, Units contributed to
another partnership, and nonliquidating as well as liquidating distributions by
a parent partnership to its partners of interests in a subpartnership);

         (2) transfers at death;

         (3) transfers between members of a family (which include brothers and
sisters, spouse, ancestors, and lineal descendants);

         (4) transfers resulting from the issuance of Units by the Partnership
in exchange for cash, property, or services;

         (5) transfers resulting from distributions from Qualified Plans; and

         (6) any transfer by a Limited Partner in one or more transactions
during any 30-day period of Units representing in the aggregate more than five
percent of the total outstanding interests in capital or profits of the
Partnership.

ADDITIONAL RESTRICTIONS ON TRANSFER

         Limited Partners who wish to transfer their Units to a new beneficial
owner are required to pay the Partnership up to $50 for each transfer to cover
the Partnership's cost of processing the transfer application and take such
other actions and execute such other documents as may be reasonably requested by
the General Partner. There is no charge for re-registration of a certificate in
the event of a marriage, divorce, death, or trust so long as the transfer is not
a result of a sale of the Units.

         In addition, the following restrictions apply to each transfer: (i) no
transfer may be made if it would cause 25% or more of the outstanding Units to
be owned by benefit plans; and (ii) no transfer is permitted unless the
transferee obtains such governmental approvals as may reasonably be required by
the General Partner, including without limitation, the written consents of the
Pennsylvania Securities Commissioner and of any other state securities agency or
commission having jurisdiction over the transfer.


<PAGE>

ALLOCATION AND DISTRIBUTION BETWEEN THE GENERAL PARTNER AND THE LIMITED PARTNERS

         Cash distributions, if any, are made quarterly on December 31, March
31, June 30, and September 30 of each year. Distributions are made 99% to the
Limited Partners and one percent to the General Partner until the Limited
Partners have received an amount equal to their Capital Contributions plus the
Priority Return; thereafter, cash distributions will be made 90% to Limited
Partners and 10% to the General Partner. Distributions made in connection with
the liquidation of the Partnership or a Partner's Units will be made in
accordance with the Partner's positive Capital Account balance as determined
under the Partnership Agreement and Treasury Regulations.

         The Priority Return is calculated on the Limited Partners' Adjusted
Capital Contributions for their Units. The Adjusted Capital Contributions will
initially be equal to the amount paid by the Limited Partners for their Units.
If distributions at any time exceed the Priority Return, the Adjusted Capital
Contributions will be reduced by the excess, decreasing the base on which the
Priority Return is calculated.

         If the proceeds resulting from the sale of any Equipment are reinvested
in Equipment, sufficient cash will be distributed to the Partners to pay the
additional federal income tax resulting from such sale for a Partner in a 39.6%
federal income tax bracket or, if lower, the maximum federal income tax rate in
effect for individuals for such taxable year.

         Generally, the General Partner is allocated Net Profits equal to its
cash distributions (but not less than one percent of Net Profits) and the
balance is allocated to the Limited Partners. Net Profits arising from
transactions in connection with the termination or liquidation of the
Partnership are allocated in the following order: (1) First, to each Partner in
an amount equal to the negative amount, if any, of his Capital Account; (2)
Second, an amount equal to the excess of the proceeds which would be distributed
to the Partners based on the Operating Distributions to the Partners over the
aggregate Capital Accounts of all the Partners, to the Partners in proportion to
their respective shares of such excess, and (3) Third, with respect to any
remaining Net Profits, to the Partners in the same proportions as if the
distributions were Operating Distributions. Net Losses, if any, are in all cases
allocated 99% to the Limited Partners and one percent to the General Partner.

         Net Profits and Net Losses are computed without taking into account, in
each taxable year of the Partnership, any items of income, gain, loss or
deduction required to be specially allocated pursuant to Section 704(b) of the
Code and the Treasury Regulation promulgated thereunder. No Limited Partner is
required to contribute cash to the capital of the Partnership in order to
restore a closing Capital Account deficit, and the General Partner has only a
limited deficit restoration obligation under the Partnership Agreement.

         Quarterly distributions in the following amounts were declared and paid
to the Limited Partners during 1998, 1997, and 1996.

<TABLE>
<CAPTION>
QUARTER ENDED                 1998            1997              1996     
-----------------------------------------------------------------------

<S>                       <C>             <C>               <C>     
March 31                    $315,678        $315,678          $315,678

June 30                      315,678         315,678           315,678

August 31                    315,678         315,678           315,678

December 31                  315,678         315,678           315,678 
                          ---------------------------------------------


                          $1,262,712      $1,262,712        $1,262,712
                          ---------------------------------------------
                          ---------------------------------------------
</TABLE>


<PAGE>

ALLOCATIONS AND DISTRIBUTIONS AMONG THE LIMITED PARTNERS

         Except during the Offering Period, Cash Available for Distribution
which is allocable to the Limited Partners is apportioned among and distributed
to them solely with reference to the number of Units owned by each as of the
Record Date for each such distribution. During the Offering Period, Cash
Available for Distribution which is allocable to the Limited Partners was
apportioned among and distributed to them with reference to both (i) the number
of Units owned by each as of each Record Date and (ii) the number of days since
the previous Record Date (or, in the case of the first Record Date, the
commencement of the Offering Period) that the Limited Partner owned the Units.

         After the Offering Period, Net Profits, Net Losses and Cash Available
for Distribution allocable to the Limited Partners is apportioned among them in
accordance with the number of Units owned by each. A different convention was
utilized during the Offering Period, whereby Net Profits and Net Losses
allocable to Limited Partners were apportioned among them in the ratio which the
product of the number of Units owned by a Limited Partner multiplied by the
number of days in which the Limited Partner owns such Units during the period
bears to the sum of such products for all Limited Partners.

         In addition, where a Limited Partner transfers Units during a taxable
year, the Limited Partner may be allocated Net Profits for a period for which
such Limited Partner does not receive a corresponding cash distribution.

ITEM 6:  SELECTED FINANCIAL DATA

         The following table sets forth, in summary form, certain financial 
data for the Partnership as of and for the year ended December 31, 1998, 
1997, 1996, 1995 and 1994. This table is qualified in its entirety by the 
more detailed information and financial statements presented elsewhere in 
this report, and should be read in conjunction with "Management's Discussion 
and Analysis of Financial Condition and Results of Operations" and the 
financial statements and related notes thereto included herein.

<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31
                                                ------------------------------------------------------------------------
                                                   1998             1997          1996            1995          1994
                                                ------------------------------------------------------------------------

<S>                                             <C>            <C>            <C>            <C>             <C>
Lease Income                                    $ 4,527,348    $ 5,195,139    $ 5,908,389    $ 4,144,609     $1,129,457

Net Income (Loss)                                  (275,254)      (906,123)    (1,319,747)       (45,235)        95,047

Cash Distributions                                1,275,467      1,275,467      1,275,467      1,195,585        443,614

Net Income (Loss) per Limited Partnership Unit         (.46)         (1.46)         (2.11)          (.10)           .33

Cash Distribution per Limited Partnership Unit         2.00           2.00           2.00           2.00           1.60

</TABLE>




<TABLE>
<CAPTION>
                                    DECEMBER 31
                ------------------------------------------------------------------
                    1998          1997          1996         1995        1994
                ------------------------------------------------------------------

<S>             <C>           <C>           <C>           <C>           <C>
Total Assets    $ 5,906,884   $10,081,644   $11,373,203   $13,910,708   $8,827,670

Notes Payable   $ 2,401,080     4,968,748     3,502,523     3,305,310    1,642,251
</TABLE>

<PAGE>

         Net income (loss) per Limited Partnership unit is computed based 
upon net loss allocated to the Limited Partners and the weighted average 
number of equivalent Limited Partnership Units outstanding during the year. 
Cash distribution per Unit is computed based upon distributions allocated to 
the Limited Partners and the weighted average number of equivalent Limited 
Partnership Units outstanding during the year.

ITEM 7:   MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
          OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

         The Partnership's primary sources of capital for the years ended
December 31, 1998, 1997 and 1996 were cash from operations of $ 757,000,
$1,746,000, and $2,526,000, respectively. The primary uses of cash were for
capital expenditures for new equipment totaling $545,000, $1,348,000, and
$1,035,000 for the years ended December 31, 1998, 1997 and 1996, respectively,
for the payment of preferred distributions to partners totaling $1,275,000 for
1998, 1997 and 1996.

         Cash is invested in money market accounts that invest directly in
treasury obligations pending the Partnership's use of such funds to purchase
additional computer equipment, to pay Partnership expenses or to make
distributions to the Partners. At December 31, 1998 and 1997 the Partnership had
approximately $2,000 and $116,000, respectively, invested in these money market
accounts.

         The Partnership's investment strategy of acquiring computer 
equipment and generally leasing it under triple-net leases to operators who 
generally meet specified financial standards minimizes the Partnership's 
operating expenses. Future minimum rentals on noncancellable operating leases 
decreased by 49% from December 31, 1997 to December 31, 1998, due to computer 
equipment leases with expiration dates in 1999. This particular industry has 
experienced a decrease in lease rates during this period due to an ongoing 
decrease in interest rates. As of December 31, 1998, the Partnership had 
future minimum rentals on noncancellable operating leases of $2,494,000 for 
the year ended 1999 and $947,000 thereafter. During 1998, 1997 and 1996, the 
Partnership incurred debt in connection with the purchase of computer 
equipment totaling $443,000, $3,982,000 and $2,344,000 respectively. At 
December 31, 1998, the outstanding debt was $2,401,000, with interest rates 
ranging from 6.4% to 8.5% and will be payable through December 2001. The 
Partnership intends to continue purchasing additional computer equipment with 
existing cash, as well as when future cash becomes available. In addition, 
the Partnership may incur debt in purchasing computer equipment in the future.

         The Partnership's cash flow from operations is expected to continue to
be adequate to cover all operating expenses, liabilities, and preferred
distributions to Partners during the next 12 month period. If available Cash
Flow or Net Disposition Proceeds are insufficient to cover the Partnership
expenses and liabilities on a short and long term basis, the Partnership will
attempt to obtain additional funds by disposing of or refinancing Equipment, or
by borrowing within its permissible limits. The Partnership may also reduce the
distributions to its Partners if it deems necessary. Since the Partnership's
leases are on a "triple-net" basis, no reserve for maintenance and repairs are
deemed necessary.

<PAGE>

RESULTS OF OPERATIONS

1998 AND 1997 OPERATING RESULTS

     For the year ended December 31, 1998 and 1997, the Partnership 
recognized income of $4,621,000 and $5,230,000 and expenses of $4,896,000 and 
$6,136,000, resulting in net losses of $275,000 and $906,000, respectively.

     Lease income decreased by 13% compared to 1997 primarily due to the 
expiration of leases in 1998. The decrease was offset by $175,000 in lease 
income from the 6 additional leases acquired in 1998 for which the 
Partnership expended approximately $545,000 in cash and assumed debt for 
equipment of $443,000 to acquire the 6 additional leases.

     Interest income decreased 37% from $35,000 for the year ended December 
31, 1997 to $22,000 for the year ended December 31, 1998, as a result of the 
rental income being utilized for Equipment purchases for the year ended 
December 31, 1998, whereas, for the year ended December 31, 1997 the rental 
income was temporarily being invested in money market accounts until being 
utilized for Equipment purchases.

     Operating expenses, excluding depreciation, consist of accounting, 
legal, outside service fees and reimbursement of expenses to Com Cap Corp. 
for administration and operation of the Partnership. The 5% increased from 
$111,000 for the year ended December 31, 1997 to $117,000 for the year ended 
December 31, 1998 is primarily attributable to cost incurred by the General 
Partner and its affiliates in connection with the administration and 
operation of the Partnership.

     The equipment management fee is equal to 5% of the gross lease revenue 
attributable to equipment which is subject to operating leases. The equipment 
management fee decreased 13% from approximately $260,000 during the year 
ended December 31, 1997 to $226,000 during the year ended December 31, 1998, 
which is consistent with the decrease in lease income.

     Interest income decreased 22% from approximately $349,000 during the 
year ended December 31, 1997 to $273,000 during the year ended December 31, 
1998, as a result of obligations incurred in the purchase of Equipment in the 
form of notes payable being satisfied during the year ended December 31, 1998.

     Depreciation and amortization expenses consist of depreciation on 
computer equipment, amortization of organization costs, equipment acquisition 
fees and debt placement fees. Depreciation and amortization during 1998 
decreased 18% from $5,219,000 in 1997 to $4,280,000 due to reduction of the 
equipment under lease.

     The Partnership sold computer equipment with a net book value of 
$822,000 and $544,000 during the years ended December 31, 1998 and 1997, 
respectively, for a gain of $72,000 for the year ended December 31, 1998 and 
for a loss of $197,000 for the year ended December 31, 1997.

     For the year ended December 31, 1998, the Partnership generated cash 
flow from operating activities of $757,000, which includes a net loss of 
$275,000 and was reduced by depreciation and amortization expenses of 
$4,280,000. Other noncash activities included in the determination of the net 
loss includes direct payments of lease income by lessees to banks of 
$3,089,000.

1997 and 1996 OPERATING RESULTS

         For the year ended December 31, 1997 and 1996, the Partnership
recognized income of $5,230,000 and $5,955,000 and expenses of $6,136,000 and
$7,275,000, resulting in net losses of $906,000 and $1,320,000, respectively.

         Lease income decreased by 12% compared to 1996 primarily due to the
expiration of leases in 1997. The decrease was offset by $1,292,000 in lease
income from the 10 additional leases acquired in 


<PAGE>

1997 for which the Partnership expended approximately $1,348,000 in cash and
assumed debt for equipment of $3,982,000 to acquire the 10 additional leases.

         Interest income decreased 26% from $47,000 for the year ended December
31, 1996 to $35,000 for the year ended December 31, 1997, as a result of the
capital contributions and rental income being utilized for Equipment purchases
for the year ended December 31, 1997, whereas, for the year ended December 31,
1996 the capital contributions and rental income were temporarily being invested
in money market accounts until being utilized for Equipment purchases.

         Operating expenses, excluding depreciation, consist of accounting,
legal, outside service fees and reimbursement of expenses to Com Cap Corp. for
administration and operation of the Partnership. The 37% decrease from
approximately $81,000 during the year ended December 31, 1996 to $111,000 during
the year ended December 31, 1997 is primarily attributable to costs incurred by
the General Partner and its affiliates in connection with the administration and
operation of the Partnership which were not charged by Com Cap Corp. in 1996.

         The equipment management fee is equal to 5% of the gross lease revenue
attributable to equipment which is subject to operating leases. The equipment
management fee decreased 12% from approximately $295,000 during the year ended
December 31, 1996 to $260,000 during the year ended December 31, 1997, which is
consistent with the decrease in lease income.

         Interest expense increased 12% from approximately $311,000 during the
year ended December 31, 1996 to approximately $349,000 during the year ended
December 31, 1997, as a result of additional debt incurred for the purchase of
Equipment.

         Depreciation and amortization expenses consist of depreciation on
computer equipment, amortization of organization costs, equipment acquisition
fees and debt placement fees. Depreciation and amortization during 1997
decreased approximately 11% from $5,896,000 in 1996 to $5,219,000 due to the
reduction of the equipment under lease. Additionally, in 1996 depreciation and
amortization contained a write down of approximately $904,000 compared to
$154,000 in 1997 due to the impairment of assets.

         The Partnership sold computer equipment with a net book value of
$1,440,000 and $544,000 during the years ended December 31, 1996 and 1997,
respectively, for a net loss of $692,000 and $197,000.

         In 1996, the Partnership adopted FASB Statement No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" and identified specific computer equipment and associated equipment
acquisition costs which were evaluated due to technological changes. 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 a charge of $904,000 to depreciation expense to record the
assets at their estimated fair value at December 31, 1996. The Partnership also
recorded a charge of $154,000 to depreciation expense to record certain assets
at their estimated residual values at December 31, 1997.

         For the year ended December 31, 1997, the Partnership generated cash
flow from operating activities of $1,746,000, which includes a net loss of
$906,000 and was reduced by depreciation and amortization expenses of
$5,219,000. Other noncash activities included in the determination of the net
loss includes direct payments of lease income by lessees to banks of $2,849,000.

IMPACT OF YEAR 2000

         The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any computer
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in a system 


<PAGE>

failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.

         The Partnership does not have any computer programs or systems as 
all services required for the management of the Partnership are provided by 
the General Partner which receives fees and certain reimbursements for these 
services. Based on a recent assessment, the General Partner determined that 
it will be required to modify or replace portions of its software so that its 
computer systems will function properly with respect to dates in the year 
2000 and thereafter. The General Partner presently believes that with 
modifications to existing software and conversions to new software, the Year 
2000 Issue will not pose significant operational problems for its computer 
systems. The General Partner expects that its modifications will be complete 
by the third quarter of 1999. The costs are not expected to exceed $15,000 
and only a small percentage of these costs would be charged to the 
Partnership. As of December 31, 1998, the General Partner has not incurred 
any significant expenses.

         The Partnership and the General Partner are not responsible for
ensuring that the computer peripheral equipment that it leases to customers is
Year 2000 compliant, however, this equipment may be subject to declines in value
or technological obsolescence due to the equipment not being Year 2000
compliant. The Year 2000 issue may also affect the carrying value of the
equipment when it comes off of lease or be detrimental in negotiating release
rates which may lead to equipment write downs or less than favorable lease
recoveries. Management has considered these factors in determining the recovery
of its equipment at December 31, 1998, in accordance with FASB Statement No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of". Based on its current assessment the Partnership does not
believe that the reduction in carrying values of equipment, if any, due to the
Year 2000 issue will have a significant effect on operations.

ITEM 7.A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Partnership believes its exposure to market risk is not material
due to the fixed interest rate of its long term debt.

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<PAGE>


                              Commonwealth Income &
                                  Growth Fund I

                              Financial Statements

                  Years ended December 31, 1998, 1997, and 1996




                                    CONTENTS
<TABLE>


<S>                                                                          <C>
Report of Independent Auditors................................................1

Audited Financial Statements

Balance Sheets................................................................2
Statements of Operations......................................................3
Statements of Partners' Capital...............................................4
Statements of Cash Flows......................................................5
Notes to Financial Statements.................................................6

</TABLE>



<PAGE>


                         Report of Independent Auditors

The Partners
Commonwealth Income & Growth Fund I

We have audited the accompanying balance sheets of Commonwealth Income & Growth
Fund I as of December 31, 1998 and 1997, and the related statements of
operations, partners' capital, and cash flows for each of the three years in the
period ended December 31, 1998. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Commonwealth Income & Growth
Fund I at December 31, 1998 and 1997, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.



                                                      /s/ Ernst & Young LLP

Philadelphia, Pennsylvania
January 23, 1999


                                                                               1
<PAGE>


                       Commonwealth Income & Growth Fund I

                                 Balance Sheets


<TABLE>
<CAPTION>

                                                                                DECEMBER 31
                                                                         1998                 1997
                                                                   ------------------------------------
<S>                                                                <C>                  <C>
ASSETS
Cash and cash equivalents                                          $         1,565      $       116,259
Lease income receivable                                                    148,204              146,562
Other receivables and deposits                                               3,303                8,567
Accounts receivable - General Partner                                        9,199                    -

Computer equipment, at cost                                             13,864,309           17,355,551
Accumulated depreciation                                                (8,306,508)          (7,928,798)
                                                                   ------------------------------------
                                                                         5,557,801            9,426,753
Equipment acquisition costs and deferred expenses, net of
    accumulated amortization of $448,421 in 1998 and $438,354
    in 1997                                                                169,252              338,076
Organization costs, net of accumulated amortization of $121,778
    in 1998 and $93,911 in 1997
                                                                            17,560               45,427
                                                                   ------------------------------------
Total assets                                                       $     5,906,884      $    10,081,644
                                                                   ------------------------------------
                                                                   ------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable                                                   $        50,310      $        24,609
Accounts payable - General Partner                                               -               18,810
Accounts payable - Commonwealth Capital Corp.                               22,480               40,929
Unearned lease income                                                      116,968              161,781
Notes payable                                                            2,401,080            4,968,748
                                                                   ------------------------------------
Total liabilities                                                        2,590,838            5,214,877

Partners' capital:
    General partner                                                          1,000                1,000
    Limited partners                                                     3,315,046            4,865,767
                                                                   ------------------------------------
Total partners' capital                                                  3,316,046            4,866,767
                                                                   ------------------------------------
Total liabilities and partners' capital                            $     5,906,884      $    10,081,644
                                                                   ------------------------------------
                                                                   ------------------------------------

</TABLE>


SEE ACCOMPANYING NOTES.


                                                                               2
<PAGE>


                       Commonwealth Income & Growth Fund I

                            Statements of Operations



<TABLE>
<CAPTION>

                                                                     YEAR ENDED DECEMBER 31
                                                           1998                1997               1996
                                                      ------------------------------------------------------
<S>                                                   <C>                 <C>                <C>
Income:
    Lease                                             $     4,527,348     $     5,195,139    $     5,908,389
    Interest                                                   21,741              34,525             46,753
    Gain on sale of computer equipment                         71,682                   -                  -
                                                      ------------------------------------------------------
                                                            4,620,771           5,229,664          5,955,142
Expenses:
    Operating, excluding depreciation                         116,833             111,263             80,883
    Equipment management fee - General
    Partner                                                   226,367             259,757            295,420
    Interest                                                  272,640             348,681            311,247
    Depreciation                                            4,039,371           4,912,073          5,555,331
    Amortization of organization costs,
       equipment acquisition costs, and
       deferred expenses                                      240,814             307,323            340,200
    Loss on sale of computer equipment                              -             196,690            691,808
                                                      ------------------------------------------------------
                                                            4,896,025           6,135,787          7,274,889
                                                      ------------------------------------------------------
Net loss                                              $      (275,254)    $      (906,123)   $    (1,319,747)
                                                      ------------------------------------------------------
                                                      ------------------------------------------------------
Net loss per equivalent limited
    partnership unit                                  $          (.46)    $         (1.46)   $         (2.11)
                                                      ------------------------------------------------------
                                                      ------------------------------------------------------
Weighted average number of equivalent limited
    partnership units outstanding during the year             631,358             631,358            631,358
                                                      ------------------------------------------------------
                                                      ------------------------------------------------------

</TABLE>


SEE ACCOMPANYING NOTES.


                                                                               3
<PAGE>


                       Commonwealth Income & Growth Fund I

                         Statements of Partners' Capital



<TABLE>
<CAPTION>

                              GENERAL      LIMITED
                              PARTNER      PARTNER         GENERAL          LIMITED
                               UNITS        UNITS          PARTNER         PARTNERS           TOTAL
                            -------------------------------------------------------------------------------
<S>                           <C>          <C>          <C>              <C>              <C>
Partners' capital -
   December 31, 1995             50         631,358     $       1,000    $   9,642,571    $   9,643,571
     Net income (loss)                                         12,755       (1,332,502)      (1,319,747)
     Distributions                                            (12,755)      (1,262,712)      (1,275,467)
                            -------------------------------------------------------------------------------
Partners' capital -
   December 31, 1996             50         631,358             1,000        7,047,357        7,048,357
     Net income (loss)                                         12,755         (918,878)        (906,123)
     Distributions                                            (12,755)      (1,262,712)      (1,275,467)
                            -------------------------------------------------------------------------------
Partners' capital -
   December 31, 1997             50         631,358             1,000        4,865,767        4,866,767
     Net income (loss)                                         12,755         (288,009)        (275,254)
     Distributions                                            (12,755)      (1,262,712)      (1,275,467)
                            -------------------------------------------------------------------------------
Partners' capital -
   December 31, 1998             50         631,358     $       1,000    $   3,315,046    $   3,316,046
                            -------------------------------------------------------------------------------
                            -------------------------------------------------------------------------------

</TABLE>


SEE ACCOMPANYING NOTES.


                                                                               4
<PAGE>


                       Commonwealth Income & Growth Fund I

                            Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                    YEAR ENDED DECEMBER 31
                                                            1998               1997             1996
                                                     ------------------------------------------------------
<S>                                                    <C>               <C>              <C>
OPERATING ACTIVITIES
Net loss                                               $      (275,254)  $      (906,123) $    (1,319,747)
Adjustments to reconcile net loss to
    net cash provided by operating activities:
       Depreciation and amortization                         4,280,185         5,219,396        5,895,531
       (Gain) loss on sale of computer equipment               (71,682)          196,690          691,808
       Other non-cash activities included in
          determination of net loss                         (3,094,256)       (2,848,893)      (2,689,616)
       Changes in operating assets and
          liabilities:
          Lease income receivable                               (1,642)          112,488           51,405
          Other receivables and deposits                         5,264            15,017           12,193
          Accounts receivable - General
             Partner                                            (9,199)            6,772           (6,772)
          Accounts payable                                      25,701           (39,773)         (11,741)
          Accounts payable - General Partner                   (18,810)           18,810          (83,874)
          Accounts payable - Commonwealth Capital
              Corp.                                            (38,626)           39,106                -
          Unearned lease income                                (44,813)          (67,036)         (13,536)
                                                       ---------------------------------------------------
Net cash provided by operating activities                      756,868         1,746,454        2,525,651

INVESTING ACTIVITIES
Capital expenditures                                          (544,691)       (1,347,809)      (1,035,293)
Accounts payable - Commonwealth Capital
    Corp.                                                       (1,823)            1,823          (22,222)
Net proceeds from sale of computer
    equipment                                                  893,739           347,654          748,241
Payment of computer equipment payable                                -          (195,864)          (9,624)
Equipment acquisition fees paid to the
    General Partner                                            (39,699)         (213,186)        (156,616)
                                                       ---------------------------------------------------
Net cash provided by (used in) investing activities            307,526        (1,407,382)        (475,514)

FINANCING ACTIVITIES
Proceeds from short-term note payable                           78,804                 -                -
Advance from Commonwealth Capital Corp.                         22,000                 -                -
Distributions to partners                                   (1,275,467)       (1,275,467)      (1,275,467)
Debt placement fee paid to the General
    Partner                                                     (4,425)          (30,141)         (33,713)
                                                       ---------------------------------------------------
Net cash used in financing activities                       (1,179,088)       (1,305,608)      (1,309,180)
                                                       ---------------------------------------------------
Net (decrease) increase in cash and cash
    equivalents                                               (114,694)         (966,536)         740,957
Cash and cash equivalents at beginning of
    year                                                       116,259         1,082,795          341,838
                                                       ---------------------------------------------------
Cash and cash equivalents at end of year               $         1,565   $       116,259  $     1,082,795
                                                       ---------------------------------------------------
                                                       ---------------------------------------------------

</TABLE>


SEE ACCOMPANYING NOTES.


                                                                               5
<PAGE>


                       Commonwealth Income & Growth Fund I

                          Notes to Financial Statements

                                December 31, 1998

1. BUSINESS

Commonwealth Income & Growth Fund I (the "Partnership") is a limited partnership
organized in the Commonwealth of Pennsylvania to acquire, own, lease, and sell
various types of computer peripheral equipment and other similar capital
equipment, which will be leased primarily to U.S. corporations and institutions.
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. Approximately ten years
after the commencement of operations, the Partnership intends to have sold or
otherwise disposed of all of its computer equipment, make final distributions to
partners, and to dissolve. Unless sooner terminated, the Partnership will
continue until December 31, 2004.

Allocations of income and distributions of cash are based on Commonwealth Income
& Growth Fund I, Limited Partnership Agreement (the "Agreement"). The various
allocations 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. Annual cash
distributions to limited partners have been made at a rate of 10% (Preferred
Distribution) of their original contributed capital. Distributions during 1998,
1997, and 1996 reflect an annual return of capital in the amount of
approximately $2.00 per limited partnership unit, for units which were
outstanding for the entire year. In the event the Partnership is unable to
distribute sufficient cash to meet the intended preferred distribution, such
amounts will be deferred with no interest until sufficient cash flow is
available, as determined by the General Partner or until the liquidation of the
Partnership. The Partnership may also reduce distributions to its partners if it
deems necessary. Further, ongoing acquisition fees, equipment management fees,
and financing fees payable to the General Partner (Note 4) will also be deferred
until payment of any unpaid Preferred Distribution.

2. ACCOUNTING POLICIES

REVENUE RECOGNITION

Through December 31, 1998, the Partnership has only entered into operating
leases. Lease revenue is recognized on a monthly basis in accordance with the
terms of the operating lease agreements.


                                                                               6
<PAGE>


                       Commonwealth Income & Growth Fund I

                    Notes to Financial Statements (continued)


2. ACCOUNTING POLICIES (Continued)

USE OF ESTIMATES

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

LONG-LIVED ASSETS

The 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 an 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 an impairment exists. The
amount of the impairment is determined based on the difference between the
carrying value and the fair value. Fair value is determined based on estimated
discounted cash flows to be generated by the asset.

During 1998, 1997, and 1996 the Partnership identified specific computer
equipment and associated equipment acquisition costs which were evaluated due to
technological changes. 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 $135,000, $154,000, and
$904,000 in the fourth quarter of 1998, 1997, and 1996, respectively, to record
the assets at their estimated fair value. Such amounts have been 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 4 years. Other assets,
consisting of organization costs and other deferred expenses, are amortized on a
straight-line basis over 2 to 5 year lives. Unamortized acquisition fees are
charged to amortization expense when the associated leased equipment is sold.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less to be cash equivalents. At December 31, 1998 and 1997, cash
equivalents were invested in a money market fund investing directly in Treasury
obligations.


                                                                               7
<PAGE>


                       Commonwealth Income & Growth Fund I

                    Notes to Financial Statements (continued)


2. ACCOUNTING POLICIES (Continued)

INCOME TAXES

The 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.

OFFERING COSTS

Offering costs are payments for selling commissions of 7% and dealer manager
fees of 2% of the partners' contributed capital, professional fees and other
offering expenses relating to the syndication. These costs are deducted from
partnership capital in the accompanying financial statements.

NET LOSS PER EQUIVALENT LIMITED PARTNERSHIP UNIT

The net loss per equivalent limited partnership unit is computed based upon net
loss allocated to the limited partners and the weighted average number of
equivalent units outstanding during the year.

IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In 1998, Statement of Position (SOP) 98-5, "Reporting on the Costs of Start-up
Activities," was issued which requires that the costs associated with such
activities be expensed as incurred. SOP 98-5 is required to be adopted in the
first quarter of 1999 and will result in the write-off of $18,000 of unamortized
organization costs.

3. COMPUTER EQUIPMENT

The Partnership is the lessor of equipment under operating leases with periods
ranging from 18 to 48 months. In general, associated costs such as repairs and
maintenance, insurance and property taxes are paid by the lessee.


                                                                               8
<PAGE>


                       Commonwealth Income & Growth Fund I

                    Notes to Financial Statements (continued)


3. COMPUTER EQUIPMENT (Continued)

The following is a schedule of future minimum rentals on noncancelable operating
leases at December 31, 1998:

<TABLE>

                 <S>                                 <C> 
                 1999                                   $    2,494,000
                 2000                                          821,000
                 2001                                          126,000
                                                        --------------
                                                        $    3,441,000
                                                        --------------
                                                        --------------

</TABLE>


Lease income from two lessees, each exceeding 10% of total lease income,
aggregated 27%, 23%, and 35% of lease income for the years ended December 31,
1998, 1997, and 1996, respectively.

4. RELATED PARTY TRANSACTIONS

REIMBURSEMENT OF 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
for certain expenses incurred by the General Partners and its affiliates in
connection with the administration and operation of the Partnership. During 1998
and 1997 the Partnership paid $41,000 and $54,000, respectively, to the General
Partner for reimbursement of expenses. During 1996, the Partnership did not
reimburse any expenses to the General Partner.

EQUIPMENT ACQUISITION FEE

The 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 the lease thereof or sale
under a conditional sales contract. During 1998, 1997, and 1996, equipment
acquisition fees of approximately $40,000, $213,000, and $157,000 respectively,
were paid to the General Partner.


                                                                               9
<PAGE>


                       Commonwealth Income & Growth Fund I

                    Notes to Financial Statements (continued)


4. RELATED PARTY TRANSACTIONS (Continued)

DEBT PLACEMENT FEE

As 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.
During 1998, 1997, and 1996, debt placement fees of approximately $4,000,
$30,000, and $33,000, respectively, were paid to the General Partner.

EQUIPMENT MANAGEMENT FEE

The 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
leases. During 1998, 1997, and 1996, equipment management fees of approximately
$226,000, $260,000, and $295,000, respectively, were paid to the General Partner
as determined pursuant to section (ii) above.

RE-LEASE FEE

As compensation for providing re-leasing 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 ("Re-lease"), the General Partner shall receive, on
a monthly basis, a Re-lease 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 Re-lease.
There were no such fees paid to the General Partner in 1998, 1997, or 1996.


                                                                              10
<PAGE>


                       Commonwealth Income & Growth Fund I

                    Notes to Financial Statements (continued)


4. RELATED PARTY TRANSACTIONS (Continued)

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 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. There were no such fees paid to the General
Partner in 1998, 1997, or 1996.

5. NOTES PAYABLE

Notes payable consisted of the following:
<TABLE>
<CAPTION>

                                                                           1998                 1997
                                                                    -----------------------------------------
<S>                                                                      <C>                  <C>
Installment note payable to a bank; interest at 8.8%; due in monthly
    installments of $5,607 including interest through
    August 1998                                                           $         -         $    43,415
Installment note payable to a bank; interest at 8.6%; due in
    monthly installments of $16,639 including interest through
    September 1998                                                                  -             144,501
Installment note payable to a bank; interest at 7.8%; due in
    monthly installments of $10,166 including interest through
    November 1998                                                                   -             107,746
Installment note payable to a bank; interest at 7.5%; due in
    monthly installments of $4,115 including interest through
    December 1998                                                                   -              47,751
Installment note payable to a bank; interest at 7.9%; due in
    monthly installments of $7,683 including interest through June
    1999                                                                            -             130,042

</TABLE>


                                                                              11
<PAGE>


                       Commonwealth Income & Growth Fund I

                    Notes to Financial Statements (continued)


5. NOTES PAYABLE (Continued)

Notes payable consisted of the following:

<TABLE>
<CAPTION>

                                                                           1998                 1997
                                                                    -----------------------------------------
<S>                                                                   <C>                 <C>
Installment note payable to a bank; interest at 6.4%; due in monthly
    installments of $14,749 including interest through
    December 1998                                                     $             -     $       171,020
Installment note payable to a bank; interest at 7.0%; due in
    monthly installments of $34,621 including interest through
    October 1998                                                                    -             335,433
Installment note payable to a bank; interest at 6.5%; due in
    monthly installments of $15,983 including interest through
    February 1999                                                              31,708             214,928
Installment note payable to a bank; interest at 8.5%; due in
    monthly installments of $29,191 including interest through
    March 1999                                                                 86,347             414,018
Installment note payable to a bank; interest at 7.5%; due in
    monthly installments of $15,501 including interest through
    June 1999                                                                 105,849             276,895
Installment note payable to a bank; interest at 7.2%; due in
    monthly installments of $10,711 including interest through
    July 1999                                                                  73,209             191,795
Installment note payable to a bank; interest at 6.7%; due in
    monthly installments of $11,501 including interest through
    September 1999                                                            100,690             227,363
Installment note payable to a bank; interest at 6.8%; due in
    monthly installments of $22,520 including interest through
    November 1999                                                             239,559             484,578

</TABLE>


                                                                              12
<PAGE>


                       Commonwealth Income & Growth Fund I

                    Notes to Financial Statements (continued)


5. NOTES PAYABLE (Continued)

Notes payable consisted of the following: (continued)

<TABLE>
<CAPTION>

                                                                           1998                 1997
                                                                    -----------------------------------------
<S>                                                                    <C>                <C>
Installment note payable to a bank; interest at 7.5%; due in monthly
    installments of $6,597 including interest through
    February 2000                                                      $       88,167     $       157,855
Installment note payable to a bank; interest at 7.10%; due in
    monthly installments of $29,786 including interest through May
    2000                                                                      480,556             792,084
Installment note payable to a bank; interest at 7.3%; due in
    monthly installments of $9,040 including interest through July
    2000                                                                      161,807             254,862
Installment note payable to a bank; interest at 6.4%; due in
    monthly installments of $21,031 including interest through
    September 2000                                                            416,767             634,833
Installment note payable to a bank; interest at 7.12%; due in
    monthly installments of $11,060 including interest through
    October 2000                                                              227,477             339,629
Installment note payable to a bank; interest at 7.2%, due in
    monthly installments of $4,203 including interest through
    December 1999                                                              48,536                   -
Installment note payable to a bank; interest at 6.5%, due in
    monthly installments of $6,989 including interest through
    November 2000                                                             150,770                   -
Installment note payable to a bank; interest at 7.0%, due in
    monthly installments of $5,852 including interest through
    December 2001                                                             189,638                   -
                                                                    -----------------------------------------
                                                                       $    2,401,080      $    4,968,748
                                                                    -----------------------------------------
                                                                    -----------------------------------------

</TABLE>


These notes are secured by specific computer equipment and are nonrecourse
liabilities of the Partnership. Aggregate maturities of notes payable for each
of the three years subsequent to December 31, 1998 are as follows:

<TABLE>

     <S>                           <C>
     1999                          $    1,683,290
     2000                                 650,144
     2001                                  67,646
                                   --------------
                                   $    2,401,080
                                   --------------
                                   --------------

</TABLE>


The fair market value of debt approximates its carrying value at December 31,
1998 and 1997.


                                                                              13
<PAGE>


                       Commonwealth Income & Growth Fund I

                    Notes to Financial Statements (continued)


6. SUPPLEMENTAL CASH FLOW INFORMATION

Other non-cash activities included in the determination of net loss are as
follows:

<TABLE>
<CAPTION>

                                                            1998             1997              1996
                                                     ------------------------------------------------------
<S>                                                    <C>               <C>             <C>
Lease income, net of interest expense on
    notes payable realized as a result of direct
    payment of principal by lessee to bank             $    3,088,868    $    2,848,893   $    2,674,867
Lease income paid to original lessor in lieu
    of cash payment for computer equipment
    acquired                                                    5,388                 -           14,749
                                                     ------------------------------------------------------
Total adjustment to net loss from other
    non-cash activities                                $    3,094,256    $    2,848,893   $    2,689,616
                                                     ------------------------------------------------------
                                                     ------------------------------------------------------

</TABLE>


No interest or principal on notes payable was paid by the Partnership because
direct payment was made by lessee to the bank in lieu of collection of lease
income and payment of interest and principal by the Partnership.

Non-cash investing and financing activities include the following:

<TABLE>
<CAPTION>

                                                            1998             1997              1996
                                                     ------------------------------------------------------
<S>                                                    <C>               <C>              <C>
Debt assumed in connection with purchase
    of computer equipment                              $      442,937    $    3,981,858   $    2,344,453
                                                     ------------------------------------------------------
                                                     ------------------------------------------------------
Accounts payable in connection with the
    purchase of computer equipment                      $           -                 -   $      529,124
                                                     ------------------------------------------------------
                                                     ------------------------------------------------------
Computer equipment payable converted to a
    note payable                                       $            -    $      333,260   $      527,627
                                                     ------------------------------------------------------
                                                     ------------------------------------------------------

</TABLE>


                                                                              14
<PAGE>


                       Commonwealth Income & Growth Fund I

                    Notes to Financial Statements (continued)


7. RECONCILIATION OF NET LOSS REPORTED FOR FINANCIAL REPORTING PURPOSES TO
   TAXABLE LOSS ON THE FEDERAL PARTNERSHIP RETURN

<TABLE>
<CAPTION>

                                                            1998             1997              1996
                                                     ------------------------------------------------------
<S>                                                    <C>               <C>              <C>
Net loss for financial reporting purposes              $      (275,254)  $      (906,123) $    (1,319,747)
Adjustments:
    Loss on sale of computer equipment                        (287,465)       (1,224,887)      (1,177,731)
    Depreciation                                               405,303           241,706          469,401
    Amortization                                               185,057           248,516          287,516
    Unearned lease income                                      (38,829)           27,603           14,055
    Penalties and other                                        (25,606)           39,161                -
                                                     ------------------------------------------------------
Taxable loss on the Federal Partnership Return
                                                       $       (36,794)  $    (1,574,024) $    (1,726,506)
                                                     ------------------------------------------------------
                                                     ------------------------------------------------------

</TABLE>




                                                                              15

<PAGE>


                     Commonwealth Income & Growth Fund, Inc.
       (an indirect wholly-owned subsidiary of Commonwealth Capital Corp.)

                                  Balance Sheet

                                February 28, 1998




                                    CONTENTS
<TABLE>

<S>                                                                         <C>
Report of Independent Auditors.................................................1

Balance Sheet..................................................................2
Notes to Balance Sheet.........................................................3

</TABLE>


<PAGE>


                         Report of Independent Auditors

To the Stockholder
Commonwealth Income & Growth Fund, Inc.

We have audited the accompanying balance sheet of Commonwealth Income & Growth
Fund, Inc. (an indirect wholly-owned subsidiary of Commonwealth Capital Corp.)
as of February 28, 1998. This balance sheet is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
balance sheet based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Commonwealth Income & Growth Fund,
Inc. at February 28, 1998, in conformity with generally accepted accounting
principles.


                                                      /s/ Ernst & Young LLP

Philadelphia, Pennsylvania
April 3, 1998




                                                                               1
<PAGE>


                     Commonwealth Income & Growth Fund, Inc.
       (an indirect wholly-owned subsidiary of Commonwealth Capital Corp.)

                                  Balance Sheet

                                February 28, 1998

<TABLE>

<S>                                                          <C>
ASSETS
Cash                                                         $           500
Investment in Partnerships                                             3,000
                                                             ---------------
                                                             $         3,500
                                                             ---------------
                                                             ---------------
LIABILITIES
Accounts payable to Income Funds and
    Commonwealth Capital Corp.                               $         2,400


STOCKHOLDERS' EQUITY Common stock at $1 stated value:
    Authorized shares--1,000
    Issued and outstanding shares--100                                   100
Additional paid-in capital                                         1,001,000
                                                             ---------------
                                                                   1,001,100
Less: note receivable                                             (1,000,000)
                                                             ---------------
                                                                       1,100
                                                             ---------------
                                                             $         3,500
                                                             ---------------
                                                             ---------------


</TABLE>


SEE ACCOMPANYING NOTES.



                                                                               2
<PAGE>


                     Commonwealth Income & Growth Fund, Inc.
       (an indirect wholly-owned subsidiary of Commonwealth Capital Corp.)

                             Notes to Balance Sheet

                                February 28, 1998

1. THE COMPANY

Commonwealth Income & Growth Fund, Inc. (the "Company") is a wholly-owned
subsidiary of Commonwealth of Delaware, Inc. which in turn is a wholly-owned
subsidiary of Commonwealth Capital Corp. ("CCC"). The Company is the sole
General Partner of Commonwealth Income & Growth Fund I, a Pennsylvania limited
partnership, the sole General Partner of Commonwealth Income & Growth Fund II, a
Pennsylvania limited partnership, and the sole General Partner of Commonwealth
Income & Growth Fund III, a Pennsylvania limited partnership. The three limited
partnerships described above are collectively referred to herein as the
"Partnerships."

CCC has provided additional capital by means of a noninterest-bearing demand
note in the amount of $1,000,000, so that the Company will at all times have a
net worth (which includes the net equity of the Company and the demand note
receivable from CCC) of at least $1,000,000. In computing the Company's net
worth for this purpose, its interest in the Partnerships and any amounts and
notes receivable from and payable to the Partnerships will be excluded. The
Company's equity has been reduced by the note receivable from CCC resulting in
net equity of $1,100, which may be different for tax purposes. The Company's
operations will be included in the consolidated federal income tax return of
CCC.

2. INVESTMENT IN PARTNERSHIPS

The Company contributed $3,000 in cash to the Partnerships for its general
partner interest. The Company may, at its sole discretion, purchase a limited
partnership interest in the Partnerships ("Units") for an additional capital
contribution of $20 per Unit with a minimum investment of 125 Units.

3. RELATED PARTY TRANSACTIONS

The Company and its affiliates receive substantial fees and compensation in
connection with the offering of Units and the management of the Partnerships'
assets.


                                                                               3


<PAGE>


                           Commonwealth Capital Corp.

                           Consolidated Balance Sheet

                                February 28, 1998






                                    CONTENTS
<TABLE>


<S>                                                                          <C>
Report of Independent Auditors................................................1

Consolidated Balance Sheet....................................................2
Notes to Consolidated Balance Sheet...........................................3

</TABLE>



<PAGE>


                         Report of Independent Auditors

The Stockholder
Commonwealth Capital Corp.

We have audited the accompanying consolidated balance sheet of Commonwealth
Capital Corp. as of February 28, 1998. This balance sheet is the responsibility
of the Company's management. Our responsibility is to express an opinion on this
balance sheet based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the consolidated financial position of Commonwealth Capital
Corp. at February 28, 1998 in conformity with generally accepted accounting
principles.


                                                      /s/ Ernst & Young LLP

Philadelphia, Pennsylvania
April 3, 1998




                                                                               1
<PAGE>


                           Commonwealth Capital Corp.

                           Consolidated Balance Sheet

                                February 28, 1998
<TABLE>

<S>                                                       <C>
ASSETS
Cash and cash equivalents                                 $          143,089
Receivables from Income Funds                                        190,749
Advances to Income Funds                                             232,000
Other receivables                                                    114,607
Income taxes receivable                                               50,000
Minimum lease payments receivable, net of
    unearned interest income of $2,480,187                         5,785,000
Investment in Income Funds                                            15,200
Other assets                                                          11,731
Office furniture and equipment, net of
    accumulated depreciation of $97,926                               19,926
Deferred offering costs                                              223,670
                                                          ------------------
Total assets                                              $        6,785,972
                                                          ------------------
                                                          ------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and accrued expenses                     $          252,987
Due to Income Funds                                                   46,113
Nonrecourse obligations                                            5,785,000
                                                          ------------------
Total liabilities                                                  6,084,100

Stockholder's equity:
    Common stock, $1 par value:
       Authorized shares - 1,000
       Issued and outstanding shares - 10                                 10
    Retained earnings                                                701,862
                                                          ------------------
Total stockholder's equity                                           701,872
                                                          ------------------
Total liabilities and stockholder's equity                $        6,785,972
                                                          ------------------
                                                          ------------------


</TABLE>


SEE ACCOMPANYING NOTES.



                                                                               2
<PAGE>


                           Commonwealth Capital Corp.

                       Notes to Consolidated Balance Sheet

                                February 28, 1998

3

1. BUSINESS

Commonwealth Capital Corp. (the Company), through its subsidiary, Commonwealth
of Delaware, Inc. (CDI), is primarily engaged in leasing various types of
computer peripheral equipment and other similar equipment, which are leased
primarily to U.S. corporations and institutions. Certain subsidiaries of CDI
were formed for the purpose of functioning as general partners/managing trustees
which own a 1% interest in limited partnerships/trusts (the "Income Funds"),
which were organized to acquire, own and act as lessor with respect to certain
computer equipment. As of February 28, 1998, the subsidiaries include
Commonwealth Capital Fund 1987-I, Inc., Commonwealth Capital Fund 1988-I, Inc.,
Commonwealth Capital Fund No. 3, Inc., Commonwealth Capital Fund No. 4, Inc.,
Commonwealth Capital Fund V, Inc., Commonwealth Capital Private Fund-I, Inc.,
Commonwealth Capital Fund VI, Inc., Commonwealth Capital Fund VII, Inc.,
Commonwealth Capital Private Fund - II, Inc., Commonwealth Capital Trustee VIII,
Inc., Commonwealth Capital Trustee IX, Inc., Commonwealth Capital Trustee X,
Inc., Commonwealth Capital Private Fund-III, Inc., Commonwealth Income and
Growth Fund, Inc., Commonwealth Capital Private Fund IV, Inc., Commonwealth
Capital Private Fund V, Inc., and Commonwealth Capital Private Fund VI, Inc.
(collectively the "General Partner Subsidiaries"), Commonwealth Capital
Securities Corp., Garden State Facilities Funding, Inc. (GSFF) and Commonwealth
Capital Delaware Trustee, Inc.

All of the Company's fee income is derived from the Income Funds within the
leasing industry. Commission income is derived from Commonwealth Capital
Securities Corp. which sells units of its affiliated partnerships through broker
dealer firms to their respective customers throughout the United States.

2. ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated balance sheet includes the accounts of the
Company, its wholly-owned subsidiary, CDI, and its wholly-owned subsidiaries
(Note 1). All significant intercompany accounts and transactions have been
eliminated in the accompanying consolidated balance sheet. The balance sheet is
presented on an unclassified basis in accordance with leasing industry practice.




                                                                               3
<PAGE>


                           Commonwealth Capital Corp.

                 Notes to Consolidated Balance Sheet (continued)


2. ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

The preparation of the balance sheet in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the balance sheet and accompanying notes. Actual
results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents. At February 28, 1998, cash
equivalents were invested in a money market fund investing directly in treasury
obligations.

OFFICE FURNITURE AND EQUIPMENT

Office furniture and equipment are carried at cost and are depreciated over the
estimated useful lives of the related assets ranging from 5 to 7 years using
accelerated methods.

INVESTMENT IN INCOME FUNDS

The Company accounts for its 1% interests in the Income Funds by the equity
method. In 1998, certain Income Funds had liabilities in excess of their assets.
As the Company, which serves the General Partner, is obligated to fund any
liabilities in excess of assets, the Company reduced its investment in Income
Funds and recorded a Due to Income Funds of $46,113 at February 28, 1998.
Financial information of the Income Funds as of December 31, 1997, is as
follows:

<TABLE>

<S>                                           <C>
Total assets                                  $     29,851,000
Nonrecourse debt                                    10,903,000
Other liabilities                                    2,281,000
Partners' capital                                   16,667,000
Net income (loss)                                      280,000

</TABLE>



                                                                               4
<PAGE>


                           Commonwealth Capital Corp.

                 Notes to Consolidated Balance Sheet (continued)


2. ACCOUNTING POLICIES (CONTINUED)

The Company has guaranteed the performance of certain non-monetary obligations
of the General Partner Subsidiaries to the respective Income Funds, primarily
the responsibility for management of the Income Funds. In addition, the Company
is responsible for certain capital funding requirements of the General Partner
Subsidiaries and, accordingly, holds noninterest-bearing demand notes of
approximately $4,166,000 at February 28, 1998. Such notes have been eliminated
in the consolidation of the accompanying balance sheet.

The compensation to the Company from the Income Funds includes: (1) Equipment
Acquisition Fees (4% of the purchase price of all equipment purchased by the
Income Funds); (2) Debt Placement Fees (1% of financed equipment by the Income
Funds); (3) Sales Fees Expense (3% of gross proceeds of sold equipment by the
Income Funds); and (4) Equipment Management Fees (5% of the gross operating
lease revenues of the Income Funds).

Fees from two Income Funds for the year ended February 28, 1998, each exceeding
10% of total fee income for the year, aggregated 66%.

3. LEASE COMMITMENTS

GSFF acted as lessor in a series of lease purchase transactions whereby the
underlying assets were funded by investors through certificates of participation
in the lease payments. All of GSFF's rights as lessor were assigned to a
third-party agent which administers the collection of rentals paid by the
lessee. The obligations under the certificates are nonrecourse to GSFF.
Accordingly, any reduction in the minimum lease payments receivable for
uncollectible accounts would result in an equal reduction of the nonrecourse
obligations. Amounts outstanding at February 28, 1998 under the leases and
certificates of participation are approximately $5,785,000. These amounts are
included in minimum lease payments receivable and nonrecourse obligations in the
accompanying balance sheet. Of these amounts, $4,530,000 are secured by mortgage
insurance policies maintained by the lessee. The certificates mature from 1998
to 2011.



                                                                               5
<PAGE>


                           Commonwealth Capital Corp.

                 Notes to Consolidated Balance Sheet (continued)


3. LEASE COMMITMENTS (CONTINUED)

Future minimum lease payments to be received as of February 28, 1998 are as
follows:

<TABLE>

<S>                                                     <C>
1999                                                    $       920,374
2000                                                            903,828
2001                                                            906,935
2002                                                            683,324
2003                                                            684,490
Thereafter                                                    4,166,236
                                                        ---------------
                                                              8,265,187
Less amount representing interest                             2,480,187
                                                        ---------------
Total                                                   $     5,785,000
                                                        ---------------
                                                        ---------------

</TABLE>


The Company leases an automobile, certain office equipment and office space
under noncancelable operating leases expiring in 1999 through 2001. Future
minimum lease payments under noncancelable operating leases at February 28, 1998
are $150,000 in 1999; $11,000 in 2000; and $4,000 in 2001.

4. PROFIT-SHARING PLAN

The Company has a profit-sharing plan covering all employees with one year of
service and 21 years of age. Profit-sharing contributions are made at the
discretion of management. It is the Company's policy to fund profit-sharing
costs as accrued. There was no profit-sharing contribution for the year ended
February 28, 1998.

5. INCOME TAXES

The Company files a consolidated federal income tax return with CDI and its
subsidiaries.

The Company has a net deferred tax asset of $237,000 at February 28, 1998,
arising primarily from investment tax credits and net operating loss
carryforwards. The deferred tax asset is net of deferred tax liabilities
associated with ownership of general partnership interests in the various
operating Income Funds of $53,000 at February 28, 1998. The Company has recorded
a valuation allowance of approximately $237,000 because the Company concluded
the future realization of the assets could not be reasonably assured based on
current and expected operating results.



                                                                               6
<PAGE>


                           Commonwealth Capital Corp.

                 Notes to Consolidated Balance Sheet (continued)


5. INCOME TAXES (CONTINUED)

The Company has investment tax credit carryforwards of $129,000 at February 28,
1998 which expire in 1999 through 2001. The Company has federal net operating
loss carryforwards of $1,512,000, which expire in 1999 through 2001.

6. RELATED PARTY TRANSACTIONS

During 1998, the Company made $697,000, in cash advances to certain Income Funds
to fund cash distributions to limited partners. The Company determined that
approximately $176,000 of these advances were uncollectible and such amounts
were written off. The remaining advances of $232,000 are due on demand.

During 1998, the Company determined that $12,750 in receivables from certain
Income Funds were uncollectible and such amounts were written off.

7. LEGAL SETTLEMENT

In fiscal 1998, the Company was a plaintiff in a lawsuit against a company that
provided office space and administrative support services in prior years. In
fiscal 1998, the Company was awarded a $50,000 judgment against this company
which has been included in other income. The entire balance is included in other
receivables at February 28, 1998.


                                                                              7


<PAGE>

ITEM 9:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

         NOT APPLICABLE

PART III

ITEM 10:  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

GENERAL

         The General Partner, a wholly-owned subsidiary of Commonwealth of
Delaware, Inc., a Delaware corporation, which is in turn a wholly-owned
subsidiary of Commonwealth Capital Corp., a Pennsylvania corporation ("Com Cap
Corp."), was incorporated in Pennsylvania on August 26, 1993. The General
Partner also acts as the General Partner for Commonwealth Income and Growth Fund
II and Commonwealth Income and Growth Fund III. The principal business office of
the General Partner is 1160 West Swedesford Road, Suite 340, Berwyn, PA 19312,
and its telephone number is 610-647-6800. The General Partner manages and
controls the affairs of the Partnership and has sole responsibility for all
aspects of the Partnership's operations. The officers of the General Partner
devote such time to the affairs of the Partnership as in the opinion of the
General Partner is necessary to enable it to perform its function as General
Partner. The officers of the General Partner are not required to spend their
full time in meeting their obligations to the Partnership.


<PAGE>

         The directors and officers of the General Partner and key employees of
Com Cap Corp. are as follows:

<TABLE>
<CAPTION>
NAME                       TITLE

<S>                        <C>
George S. Springsteen      Chairman of the Board of Directors and President of
                           the General Partner and Com Cap Corp.

Kimberly A. MacDougall     Executive Vice President, Chief Operating Officer and
                           Secretary of the General Partner and Com Cap Corp.

Kathleen S. Enscoe         Vice President and Controller of the General Partner
                           and Com Cap Corp.

Magdalia Cruz              Assistant Vice President of Com Cap Corp.

Henry J. Abbott            Vice President and Portfolio Manager of Com Cap Corp.
</TABLE>

         George S. Springsteen, age 64, is President of both Com Cap Corp. and
the General Partner. Mr. Springsteen is also President of the general partners
or controlling entities of several prior programs sponsored by Com Cap Corp.
with objectives similar to the Partnership's. He has been the sole shareholder
and director of Com Cap Corp. since its formation in 1978. From 1971 to 1978,
Mr. Springsteen was involved in the computer leasing business of Granite
Computer Corporation. Mr. Springsteen served as Vice President of Marketing, in
addition to other capacities, and managed a portfolio of approximately
$120,000,000 of IBM computers and peripherals. In 1978, Granite Computer
Corporation sold its equipment portfolio and left the equipment leasing
business. Mr. Springsteen acquired a portion of Granite's portfolio, client
base, employees and corporate offices in Jenkintown, Pennsylvania. The new
company began operations as Com Cap Corp. in May of 1978. Mr. Springsteen
received a Bachelor of Science degree from the University of Delaware in 1957.

         Kimberly A. MacDougall, age 39, is Executive Vice President, Chief
Operating Officer and Secretary of Com Cap Corp. and the General Partner and
joined Com Cap Corp. in 1997. She is also the President of Commonwealth Capital
Securities Corp. From 1980 to 1997, Ms. MacDougall was employed with Wheat First
Butcher Singer, a broker/dealer headquartered in Richmond, Virginia. While at
Wheat First Butcher Singer, Ms. MacDougall, Senior Vice President, served as
Marketing Manager for the Direct Investments Department, with over $450,000,000
of investments under management in real estate, equipment leasing and
energy-related industries. Ms. MacDougall holds Series 7, 63 and 39 NASD
licenses and is a member of the Equipment Leasing Association, Investment
Partnership Association and International association for Financial Planning.

         Kathleen S. Enscoe, age 33, is Vice President and Controller of Com Cap
Corp. and certain of its subsidiaries where she has been employed since 1992.
Ms. Enscoe is an active member of the Equipment Leasing Association. From 1988
to 1992, Ms. Enscoe was employed as a staff accountant in the financial
reporting department of WWF Paper Corporation. Ms. Enscoe received a B.S.B.A.
degree in 1988 from Geneva College with dual majors in accounting and business
administration.

         Magdalia Cruz, age 30, is Assistant Vice President of Com Cap Corp. and
Vice President of Commonwealth Capital Securities Corp. Ms. Cruz has been
employed by Com Cap Corp. since 1993. From 1990 to 1993, Ms. Cruz was employed
as Marketing Coordinator for Shafer DeSouza Brown. Prior to that, as a Computer
Equipment Analyst for the Defense Industrial Supply Center, a government agency
based in Philadelphia. She is completing her studies for a B.S. degree in
Business Management at West Chester University. Ms. Cruz is a member of the
Equipment Leasing Association, Investment Planning Association, and holds her
Series 22, 63, and 39 NASD licenses.


<PAGE>

         Henry J. Abbott, age 48, is Vice President and Portfolio Manager of Com
Cap Corp. and has been employed by Com Cap Corp. since 1998. Mr. Abbott has been
active in the commercial lending industry, working primarily on asset-backed
transactions for more than twenty-seven years. Before joining Commonwealth, Mr.
Abbott was a founding partner of Westwood Capital LLC, in New York. Prior to
that, as Senior Vice President for IBJ Schroder Leasing Corporation, Mr. Abbott
managed a group, specializing in providing operating lease financing programs in
the high technology sector. Mr. Abbott brings extensive knowledge and experience
in all facets of asset-backed financing and has successfully managed $1.5
billion of secured transactions. Mr. Abbott attended St. John's University. Mr.
Abbott is a member of the Equipment Leasing Association.

         The directors and officers of the General Partner are required to spend
only such time on the Partnership's affairs as is necessary in the sole
discretion of the directors of the General Partner for the proper conduct of the
Partnership's business. A substantial amount of time of such directors and
officers is expected to be spent on matters unrelated to the Partnership,
particularly after the Partnership's investments have been selected. Under
certain circumstances, such directors and officers are entitled to
indemnification from the Partnership.

ITEM 11: EXECUTIVE COMPENSATION

         The following table summarized the types, amounts and recipients of
compensation paid by the Partnership directly or indirectly to the General
Partner and its Affiliates. Some of these fees are paid regardless of the
success or profitability of the Partnership's operations and investments. While
such compensation and fees were established by the General Partner and are not
based on arm's-length negotiations, the General Partner believes that such
compensation and fees are comparable to those which would be charged by an
unaffiliated entity or entities for similar services. The Partnership Agreement
limits the liability of the General Partner and its Affiliates to the
Partnership and the Limited Partners and provides indemnification to the General
Partner and its Affiliates under certain circumstances.


<PAGE>
 
<TABLE>
<CAPTION>
                                                                                               AMOUNT    AMOUNT      AMOUNT     
                   ENTITY                                                                     INCURRED  INCURRED    INCURRED    
                 RECEIVING                                                                     DURING    DURING      DURING     
                COMPENSATION                              TYPE OF COMPENSATION                  1998      1997        1996      
--------------------------------------------  --------------------------------------------    --------- --------- ----------  
<S>                                           <C>                                             <C>       <C>       <C>

The General Partner and its Affiliates        Reimbursement of Expenses. The General            $41,000   $54,000     $0
                                              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
                                              for certain expenses incurred by the General
                                              Partner and its affiliates in connection with
                                              the administration and operation of the 
                                              Partnership.
 
The General Partner                           Equipment Acquisition Fee. An Equipment           $40,000   $213,000    $157,000
                                              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 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. When the Partnership acquired
                                              Equipment in an amount exceeding the net
                                              proceeds of the Offering available for
                                              investment in Equipment, the fee was paid
                                              when such Equipment was acquired.

The General Partner                           Debt Placement Fee. As compensation for           $4,000    $30,000     $33,000
                                              arranging Term Debt to finance the
                                              acquisition of Equipment by the Partnership,
                                              a fee equal to one percent of such
                                              indebtedness; provided, however,



<PAGE>

                                              that such fee is reduced to the extent
                                              the Partnership incurred such fees to
                                              third parties, unaffiliated with the
                                              General Partner or the lender, with respect
                                              to such indebtedness and no such fee was
                                              paid with respect to borrowings from the
                                              General Partner or its Affiliates.
 
The General Partner                           Equipment Management Fee. A monthly fee           $226,000  $260,000    $295,000
                                              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.
 
The General Partner                           Re-Lease Fee. As compensation for providing       $0        $0          $0
                                              re-leasing 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
                                              ("Re-lease"), the General Partner will
                                              receive, on a monthly basis, a Re-lease 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 Re-lease.       


The General Partner                           Equipment Liquidation Fee. With respect to        $0        $0          $0
                                              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 of 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 a 10% per 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.



<PAGE>


                                              INTEREST IN THE PARTNERSHIP

The General Partner                           Partnership Interest. The General Partner         $12,755   $12,755     $12,755
                                              has a present and continuing one percent
                                              interest of $1,000 in the Partnership's
                                              items 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.                          
</TABLE>
 


ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         NOT APPLICABLE

ITEM 13:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Partnership is subject to various conflicts on interest arising out
of its relationships with the General Partner and its Affiliates. These
conflicts include the following:

COMPETITION WITH GENERAL PARTNER AND AFFILIATES:  COMPETITION FOR 
MANAGEMENT'S TIME

         The General Partner and its Affiliate sponsor other investor programs
which are in potential competition with the Partnership in connection with the
purchase of Equipment as well as opportunities to lease and sell such Equipment.
Competition for Equipment has occurred and is likely to occur in the future. The
General Partner and its Affiliates may also form additional investor programs
which may be competitive with the Partnership.

         If one or more investor programs and the Partnership are in a position
to acquire the same Equipment, the General Partner will determine which program
will purchase the Equipment based upon the objectives of each and the
suitability of the acquisition in light of those objectives. The General Partner
will generally afford priority to the program or entity that has had funds
available to purchase Equipment for the longest period of time. If one or more
investor programs and the Partnership are in a position to enter into lease with
the same lessee or sell Equipment to the same purchaser, the General Partner
will generally afford priority to the Equipment which has been available for
lease or sale for the longest period of time.


<PAGE>

         Certain senior executives of the General Partner and its Affiliates
also serve as officers and directors of the other programs and are required to
apportion their time among these entities. The Partnership is, therefore, in
competition with the other programs for the attention and management time of the
General Partner and Affiliates. The officers and directors of the General
Partner are not required to devote all or substantially all of their time to the
affairs of the Partnership.

ACQUISITIONS

         Com Cap Corp. and the General Partner or other Affiliates of the
General Partner may acquire Equipment for the Partnership provided that (i) the
Partnership has insufficient funds at the time the Equipment is acquired, (ii)
the acquisition is in the best interest of the partnership and (iii) no benefit
to the General Partner or its Affiliates arises from the acquisition except for
compensation paid to Com Cap Corp., the General Partner or such other Affiliate
as disclosed in this Report. Com Cap Corp., the General Partner or their
Affiliates will not hold Equipment for more than 60 days prior to transfer to
the Partnership. If sufficient funds become available to the Partnership within
such 60 day period, such Equipment may be resold to the Partnership for a price
not in excess of the sum of the cost of the Equipment to such entity and any
accountable Acquisition Expenses payable to third parties which are incurred by
such entity and interest on the Purchase Price from the date of purchase to the
date of transfer to the Partnership. Com Cap Corp., the General Partner or such
other Affiliate will retain any rent or other payments received for the
Equipment, and bear all expenses and liabilities, other than accountable
Acquisition Expenses payable to third parties with respect to such Equipment,
for all periods prior to the acquisition of the Equipment by the Partnership.
Except as described above, there will be no sales of Equipment to or from any
Affiliate of Com Cap Corp.

         In certain instances, the Partnership finds it necessary, in connection
with the ordering and acquisition of Equipment, to make advances to
manufacturers or vendors with funds borrowed from the General Partner for such
purpose. The Partnership does not borrow money from the General Partner or any
of its Affiliates with a term in excess of twelve months. Interest is paid on
loans or advances (in the form of deposits with manufacturers or vendors of
Equipment or otherwise) from the General Partner of its Affiliates from their
own funds at a rate equal to that which would be charged by third party
financing institutions on comparable loans from the same purpose in the same
geographic area, but in no event in excess of the General Partner's or
Affiliate's own cost of funds. In addition, if the General Partner or its
Affiliates borrow money and loan or advance it on a short-term basis to or on
behalf of the Partnership, the General Partnership than that which the General
Partner or such Affiliates are paying. The Partnership does not loan money to
any Person including the General Partner or its Affiliates except to the extent
that a Conditional Sales Contract constitutes a loan.

         If the General Partner or any of its Affiliates purchases Equipment in
its own name and with its own funds in order to facilitate ultimate purchase by
the Partnership, the purchaser is entitled to receive interest on the funds
expended for such purchase on behalf of the Partnership. Simple interest on any
such temporary purchases is charged on a floating rate basis not in excess of
three percent over the "prime rate" from time to time announced by PNC Bank,
from the date of initial acquisition to the date of repayment by the
Partnership/ownership transfer.

         The Partnership does not invest in equipment Limited Partnerships,
general partnerships or joint ventures, except that (a) the Partnership may
invest in general partnerships or joint ventures with persons other than
equipment Programs formed by the General Partner or its Affiliates, which
partnerships or joint ventures own specific equipment; provided that (i) the
Partnership has or acquires a controlling interest in such ventures or
partnerships, (ii) the non-controlling interest is owned by a non-Affiliated,
and (iii) there are no duplicate fees; and (b) the Partnership may invest in
joint venture arrangements with other equipment Programs formed by the General
Partner or its Affiliates if such action is in the best interest of all Programs
and if all the following conditions are met: (i) all the Programs have
substantially identical investment objectives; (ii) there are no duplicate fees;
(iii) the sponsor compensation is substantially identical in each Program; (iv)
the Partnership has a right of first refusal to buy another Program's interest



<PAGE>

in a joint venture if the other Program wishes to sell equipment held in the
joint venture; (v) the investment of each Program is on substantially the same
terms and conditions; and (vi) the joint venture is formed either for the
purpose of effecting appropriated diversification for the Programs or for the
purpose of relieving the General Partner or its Affiliates from a commitment
entered into pursuant to certain provisions of the Partnership Agreement.

         As of December 31, 1998, the Partnership was indebted to Com Cap Corp.
for approximately $22,000 in connection with the Partnership's acquisition of
Equipment. The entire debt was satisfied in January 1999.

         As of December 31, 1997, the Partnership was indebted to Com Cap Corp.
for approximately $41,000 in connection with the Partnership's reimbursable
expenses. The entire debt was satisfied in January 1998.



                                    GLOSSARY

The following terms used in this Report shall (unless otherwise expressly
provided herein or unless the context otherwise requires) have the meanings set
forth below.

"Acquisition Expenses" means expenses relating to the prospective selection and
acquisition of or investment in Equipment by the Partnership, whether or not
actually acquired, including, but not limited to, legal fees and expenses,
travel and communication expenses, costs of appraisal, accounting fees and
expenses and other related expenses.

"Acquisition Fees" means the total of all fees and commissions paid by any party
in connection with the initial purchase of Equipment acquired by the
Partnership. Included in the computation of such fees or commissions shall be
the Equipment Acquisition Fee and any commission, selection fee, construction
supervision fee, financing fee, non-recurring management fee or any fee of a
similar nature, however designated.

"Adjusted Capital Contributions" means Capital Contributions of the Limited
Partners reduced by any cash distribution received by the Limited Partners
pursuant to the Partnership Agreement, to the extent such distributions exceed
any unpaid Priority Return as of the date such distributions were made.

"Affiliate" means, when used with reference to a specified Person, (i) any
person, that directly or indirectly through one or more intermediaries controls
or is controlled by or is under common control with the specified Person, (ii)
any Person that is a director or an executive officer of, partner in, or serves
in a similar capacity to, the specified Person, or any Person of which the
specified Person is an executive officer or partner or with respect to which the
specified Person serves in a similar capacity, (iii) any Person owning or
controlling 10% or more of the outstanding voting securities of such specified
Person, or (iv) if such Person is an officer, director or partner, any entity
for which such Person acts in such capacity.

"Capital Account" means the bookkeeping account maintained by the Partnership
for each Partner.

"Capital Contributions" means in the case of the General Partner, the total
amount of money contributed to the Partnership by the General Partner, and in
the case of Limited Partners, $20 for each Unit, or where the context requires,
the total Capital Contributions of all the Partners.

<PAGE>

"Cash Available for Distribution" means Cash Flow plus Net Disposition Proceeds
plus cash funds available for distribution from Partnership reserves, less such
amounts as the General Partner, in accordance with the Partnership Agreement,
causes the Partnership to reinvest in Equipment or interests therein, and less
such amounts as the General Partner, in its sole discretion, determines should
be set aside for the restoration or enhancement of Partnership reserves.

"Cash Flow" for any fiscal period means the sum of (i) cash receipts from
operations, including, but not limited to, rents or revenues arising from the
leasing or operation of the Equipment and interest, if any, earned on funds on
deposit for the Partnership, but not including Net Disposition Proceeds, minus
(ii) all cash expenses and costs incurred and paid in connection with the
ownership, lease, management, use and/or operation of the Equipment, including,
but not limited to, fees for handling and storage; all interest expenses paid
and all repayments of principal regarding borrowed funds; maintenance; repair
costs; insurance premiums; accounting and legal fees and expenses; debt
collection expenses; charges, assessments or levies imposed upon or against the
Equipment; ad valorem, gross receipts and other property taxes levied against
the Equipment; and all costs of repurchasing Units in accordance with the
Partnership Agreement; but not including depreciation or amortization of fees or
capital expenditures, or provisions for future expenditures, including, without
limitation, Organizational and Offering Expenses.

"Closing Date" means May 11, 1995.

"Code" means the Internal Revenue Code of 1986, as amended, and as may be
amended from tine to time by future federal tax statutes.

"Competitive Equipment Sale Commission" means that brokerage fee paid for
services rendered in connection with the purchase or sale of Equipment which is
reasonable, customary, and competitive in light of the size, type, and location
of the Equipment.

"Conditional Sales Contract" means an agreement to sell Equipment to a buyer in
which the seller reserves title to, and retains a security interest in, the
Equipment until the Purchase Price of the Equipment is paid.

"Effective Date" means December 17, 1993, the date on which the Partnership's
Registration Statement on Form S-1 was declared effective by the United States
Securities and Exchange Commission.

"Equipment" means each item of and all of the computer peripheral and other
similar capital equipment purchased, owned, operated, and/or leased by the
Partnership or in which the Partnership has acquired a direct or indirect
interest, together with all appliances, parts, instruments, accessories,
furnishings, or other equipment included therein and all substitutions,
renewals, or replacements of, and all additions, improvements, and accessions
to, any and all thereof.

"Full Payout Net Lease" means an initial Net Lease of the Equipment under which
the non-cancelable rental payments due (and which can be calculated at the
commencement of the Net Lease) during the initial noncancelable fixed term (not
including any renewal or extension period of the lease or other contract for the
use of the Equipment are at least sufficient to recover the Purchase Price of
the Equipment.

"General Partner" means Commonwealth Income & Growth Fund, Inc. and any
additional, substitute or successor general partner of the Partnership.

"Gross Lease Revenues" means Partnership gross receipts from leasing or other
operation of the Equipment, except that, to the extent the Partnership has
leased the Equipment from an unaffiliated party, it shall mean such receipts
less any lease expense.

"Initial Closing" means March 14, 1994, the date after the Minimum Subscription
Amount was received on which funds to acquire Units were released from the
Escrow Account and distributed to the Partnership for the acquisition of Units
by Limited Partners.


<PAGE>

"IRS" means the Internal Revenue Service.

"Limited Partner" means a person who acquires Units and who is admitted to the
Partnership as a limited partner in accordance with the terms of the Partnership
Agreement.

"Majority in Interest" means, with respect to the Partnership, Limited Partners
holding more than 50% of the outstanding Units held by all Limited Partners at
the Record Date for any vote or consent of the Limited Partners.

"Minimum Subscription Amount" means an aggregate of $2,500,000 in Subscriptions.

"Net Dispositions Proceeds" means the net proceeds realized by the Partnership
from the refinancing, sale or other disposition of Equipment, including
insurance proceeds or lessee indemnity payments arising from the loss or
destruction of Equipment, less such amounts as are used to satisfy Partnership
liabilities.

"Net Lease" means a lease or other contract under which the owner provides
equipment to a lessee or other operator in return for a payment, and the lessee
assumes all obligations and pays for the operation, repair, maintenance and
insuring of the equipment.

"Net Profits" or "Net Losses" shall be computed in accordance with Section
703(a) of the Code (including all items of income, gain, loss or deduction
required to be stated separately pursuant to Section 703(a)(1) of the Code) for
each taxable year of the Partnership or shorter period prior to an interim
closing of the Partnership's books with the following adjustments: (i) any
income of the Partnership that is exempt from federal income tax and not
otherwise taken into account in computing Net Profits and Net Loss pursuant to
this definition shall be added to such taxable income or shall reduce such
taxable loss; (ii) any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant
to Treasury Regulations section 1.704-1(b)(2)(iv)(i) and not otherwise taken
into account in computing Net Profits and Net Losses pursuant to this definition
shall be subtracted from such taxable income or loss; (iii) items of income,
gain, loss and deduction specially allocated pursuant to Section 7.3 of the
Partnership Agreement shall not be included in the computation of Net Profits or
Net Loss; and if property is reflected on the books of the Partnership at a book
value that differs from the adjusted tax basis of the property in accordance
with Treasury Regulation Section 1.704-1(b)(2)(iv)(d) or (f), depreciation,
amortization, and gain or loss with respect to such property shall be determined
by reference to such book value in a manner consistent with Treasury Regulation
Section 1.704-1(b)(2)(iv)(g). The terms "Net Profit" or "Net Losses" shall
include the Partnership's distributive share of the profit or loss of any
partnership or joint venture in which it is a partner or joint venturer.

"Offering" means the initial public offering of Units in the Partnership.

"Offering Period" means the period commencing the Effective Date and ending the
last day of the calendar month in which the Closing Date occurs.

"Operating Distributions" means the quarterly distributions made to the Partners
pursuant to Article 8 of the Partnership Agreement.

"Operating Lease" means a lease or other contractual arrangement under which an
unaffiliated party agrees to pay the Partnership, directly or indirectly, for
the use of the Equipment, and which is not a Full Payout Net Lease.

"Organizational and Offering Expenses" means the expenses incurred in connection
with the organization of the Partnership and in preparation of the Offering,
including Underwriting Commissions, listing fees and advertising expenses
specifically incurred in connection with the distribution of the Units.

"Partner (s)" means any one or more of the General Partner and the Limited
Partners.


<PAGE>

"Partnership" means Commonwealth Income & Growth Fund I, a Pennsylvania limited
partnership.

"Partnership Agreement" means that Limited Partnership Agreement of Commonwealth
Income & Growth Fund I by and among the General Partner and the Limited
Partners, pursuant to which the Partnership is governed.

"Person" means an individual, partnership, limited liability company, joint
venture, corporation, trust, estate or other entity.

"Priority Return" means an amount equal to a return at a rate of 10% per annum,
compounded daily, on the Adjusted Capital Contribution for all outstanding
Units, which amount shall begin accruing at the end of the calendar quarter in
which such Units are sold by the Partnership.

"Proceeds" means proceeds from the sale of the Units.

"Program" means a limited or general partnership, joint venture, unincorporated
association or similar organization, other than a corporation formed and
operated for the primary purpose of investment in and the operation of or gain
from an interest in Equipment.

"Purchase Price" means, with respect to any Equipment, an amount equal to the
sum of (i) the invoice cost of such Equipment or any other such amount paid to
the seller, (ii) any closing, delivery and installation charges associated
therewith not included in such invoice cost and paid by or on behalf of the
Partnership, (iii) the cost of any capitalized modifications or upgrades paid by
on or behalf of the Partnership in connection with its purchase of the
Equipment, and (iv) solely for purposes of the definition of Full Payout Net
Lease, the amount of the Equipment Acquisition Fee and any other Acquisition
Fees.

"Retained Proceeds" means Cash Available for Distribution, which instead of
being distributed to the Partners is retained by the Partnership for the purpose
of acquiring or investing in Equipment.

"Term Debt" means debt of the Partnership with a term in excess of twelve
months, incurred with respect to acquiring or investing in Equipment, or
refinancing non-Term Debt, but not debt incurred with respect to refinancing
existing Partnership Term Debt.

"Unit" means a Limited Partnership interest in the Partnership.

                                     PART IV

ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON 8-K

(a)(1)   Financial Statements.

         Commonwealth Income & Growth Fund I 
         Report of Independent Auditors
         Balance Sheets as of December 31, 1998 and 1997. 
         Statements of Operations for each of the three years ended 
         December 31, 1998, 1997 and 1996
         Statements of Partners' Capital for each of the three years ended
         December 31, 1998, 1997 and 1996. 
         Statements of Cash Flows for each of the three years ended 
         December 31, 1998, 1997 and 1996 
         Notes to Financial Statements

         Commonwealth Income & Growth Fund, Inc.

<PAGE>

         Report of Independent Auditors
         Balance Sheet as of February 28, 1998
         Notes to Balance Sheet

         Commonwealth Capital Corp.
         Report of Independent Auditors
         Consolidated Balance Sheet as of February 28, 1998
         Notes to Consolidated Balance Sheet

(a)(2)   Schedules.

         Schedules are omitted because they are not applicable, not required, or
         because the required information is included in the financial
         statements and notes thereto.

(a)(3)   Exhibits.
         * 3.1 Certificate of Limited Partnership
         **3.2 Agreement of Limited Partnership

         27 FINANCIAL DATA SCHEDULE

         *        Incorporated by reference from the Partnership's Registration
                  Statement on Form S-1 (Registration No. 33-69996)

         **       Incorporated by reference for the Partnership's Annual Report
                  on Form 10-K for the year ended December 31, 1994.

(b)      Reports on Form 8-K
         NOT APPLICABLE

(c)      Exhibits.


<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf on March 31, 1999 by the undersigned thereunto duly authorized.

                                 COMMONWEALTH INCOME & GROWTH FUND I
                                      By:   COMMONWEALTH INCOME &
                                            GROWTH FUND, INC., General Partner

                                 By:   /s/ George S. Springsteen
                                    ----------------------------
                                       George S. Springsteen, President

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on March 31, 1999.

<TABLE>
<CAPTION>
SIGNATURE                                            CAPACITY
---------                                            --------

<S>                                <C>
/s/ GEORGE S. SPRINGSTEEN          Chairman, President and Sole Director of
--------------------------         Commonwealth Income & Growth Fund, Inc.
George S. Springsteen     

/s/ KIMBERLY A. MACDOUGALL         Executive Vice President Chief Operating
--------------------------         Officer and Secretary
Kimberly A. MacDougall    

/s/ KATHLEEN S. ENSCOE             Vice President and Controller of Commonwealth
--------------------------         Income & Growth Fund, Inc.
Kathleen S. Enscoe        

</TABLE>