<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, 2002

[ ] 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)

                               470 John Young Way
                                 Exton, PA 19341
          (Address, including zip code, of principal executive offices)

                                 (610) 594-9600
               (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.

                       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, 2002 are incorporated by reference as Exhibits in Part IV of this
Report.

                                        2
<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 and leases equipment principally
to U.S. corporations and other institutions pursuant to Operating Leases. The
Partnership retains the flexibility to enter into Full Payout Net Leases, Direct
Financing Leases and Conditional Sales Contracts.

         The Partnership's principal investment objectives are to;

         (a)      acquire, lease and sell Equipment to generate revenues from
operations sufficient to provide annual 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.

                                        3
<PAGE>

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.

         As of December 31, 2002, substantially 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, Direct
Financing Leases or sold under Conditional Sales Contracts at the time of
acquisition or the Partnership may enter into a Full Payout Net Lease, Direct
Financing 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 that 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, 2002, 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.

                                        4
<PAGE>

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, historically, that
the 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,
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 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.

                                        5
<PAGE>

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. Through December 31, 2002, the Partnership has
acquired a diversified Equipment portfolio, which it has leased to 32 different
companies located throughout the United States. The allocations are as follows:

                       Equipment Type                         Approximate %
                   ---------------------------              ------------------
                        Workstations                              58%

                       Tape Libraries                             16%

                      Escon Directors                              9%

                      Tape Subsystems                              6%

                      Optical Storage                              6%

                     High-End Printers                             2%

                          Routers                                  2%

                      Low-End Printers                             1%
                   -----------------------                 ----------------

                           Total                                 100%
                   =======================                 ================

         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 retain a security interest in, the Equipment until the Purchase
Price of the Equipment is paid. As of December 31, 2002, 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. The Equipment may also be
leased pursuant to Capital Leases. Capital Leases are leases under which the
Equipment either transfers to the lessee at the end of the lease term, contains
a bargain purchase price option, the lease term is equal to 75% or more of the
estimated economic life of the Equipment, or the present value at the beginning
of the lease term of the minimum lease payments is equal to or exceeds 90% of
the excess of the fair value of the Equipment. As of December 31, 2002, we have
entered into one Capital Lease.

                                        6
<PAGE>

         In general, the terms of the Partnership's leases, whether the
Equipment is leased pursuant to an Operating lease, Capital 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, Capital Lease 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 Capital Lease or 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 Capital Lease or 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 Capital Lease or Full Payout Net Lease. Also, the annual rental
payments received under an Operating Lease are ordinarily higher than those
received under a Capital Lease or 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, 2002, all leases that have
been entered into are "triple net leases".

                                        7
<PAGE>

         The General Partner has not established any standards for lessees to
whom 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, 2002, 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 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, 2002, the aggregate
nonrecourse debt outstanding of $445,000 was 16.7% 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, 2002, the
Partnership has not exercised this option.

                                        8
<PAGE>

         To date, the General Partner has caused the Partnership to borrow funds
at fixed interest rates and plans to continue borrowing additional funds on the
same basis, to the fullest extent practicable. The Partnership may, from time to
time, borrow funds at rates, which vary with the "prime" or "base" rate,
however, in such a case, 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,
2002, 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, 2002, the Partnership has refinanced one of its notes payable with
a lessee. The note payable, originally set to expire in February, 2004, had a
balance of approximately $31,000 at the time of the refinancing. The Partnership
received cash of approximately $11,000, net of refinancing fees of approximately
$1,000. The new note payable, which was approximately $43,000 at the time of the
refinancing, expires in June 2006. Simultaneous, with the refinancing, the
Partnership entered into a Direct Financing Capital Lease with the lessee for
this Equipment.

                                        9
<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 2006. Notwithstanding the
Partnership's objective to sell all of its assets and dissolve by December 31,
2006, 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, 2006, 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.

                                       10
<PAGE>

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.

         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

         The Partnership, through CCC, participates in the purchase of equipment
subject to associated debt obligations and lease agreements. The purchase price,
list price and monthly rentals presented below are the Partnership's
participation of the total amounts, based on CCC's allocation of the equipment
to the Partnership, and in some instances, other affiliated partnerships.

         As of March 26, 2003, the Partnership has purchased, or has made the
commitment to purchase, the following Equipment:

                                       11
<PAGE>

<TABLE>
<CAPTION>
             LESSEE                    MFG       EQUIPMENT DESCRIPTION    LIST PRICE     PURCHASE     MONTHLY    LEASE
                                                                                           PRICE       RENTAL    TERM
<S>                                 <C>          <C>                      <C>           <C>            <C>       <C>
Xerox Corp.                            SUN          (32) Workstation    $   440,800    $  277,705    $    286     39
Xerox Corp.                            SUN            (4)SPARC2000          590,840       305,875       1,019     39
Fingerhut Corp.                       SIEMEN            2240-004            722,000       459,592       8,558     48
Chrysler Corp.                         STK            (2) 4490-M30          686,158       490,110      12,001     48
GE Industrial & Power Systems           HP            HP9000/J200           202,680       157,635       4,115     36
Wang Laboratories Inc.                 PYR              NILE 150            937,290       589,287      16,639     36
Chrysler Corp.                         IBM              3745-31A            242,244       184,383       4,203     48
Sprint Communications Co.              STK            (9)9490-M32         1,335,897       703,968      15,501     36
Honda R&D                              SGI              4XR10000            400,220       298,094       7,683     36
Sprint Communications Co.              IBM            (2) 3995-133          421,500       286,536      10,166     24
Equitable Life Assurance Co.           LEX             (80) N240            571,351       497,477      11,501     36
Chrysler Corp.                         STK        Tape Lib/Redwd/Timbl    1,693,479       997,891      22,520     36
Equitable Life Assurance Co.           LEX             (16)OPTRA             74,458        94,098       2,615     36
Kaiser                                 IBM         3745-611A/3746-900     2,149,234     1,191,555      29,786     36
Litton                                 SUN              (1)E3000            251,967       148,492       3,771     36
Sprint Communications Co.              SUN             (2)ES5000            371,640       231,551       7,199     30
Computer Science Corp.                 SGI          144Workstations       2,055,893       822,455      21,031     36
Paine Webber                           IBM            (2)9032-003           932,206       455,473      11,060     36
Charles Schwab                         IBM            (6) 9032-003          495,889       307,983       6,989     36
ADP                                    IBM        (3)3490-A20 (1)-B40       579,850       379,682       5,036     36
Lucent                                 SUN          (1) 3000 Server          70,300        45,892       1,181     36
Lucent                                 SUN          (1) 3500 Server          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 ES5000          21,400        14,491         602     25
Kaiser                                CISCO           (33)Routers            65,835        38,948       1,333     36
Morgan Stanley                         SUN              ENT4000             184,144       122,751       3,018     24
Moore Business                         IBM           (2)3900-DW1/2          515,000       460,490       9,040     43
SMS                                    STK             Tape Drive         1,452,140       576,586      34,140     36
UNUM                                   IBM              Printer             343,010       343,010       6,338     48
Thomson Consumer Electric               HP          Visualize C3600          26,670        17,682         696     24
GE Medical                            CISCO             Routers              88,000        58,465       1,565     36
GE Medical                            CISCO             Routers              59,917        35,570         950     35
GE Medical                            CISCO           (6) Routers            34,650        22,976         617     36
Thomson Consumer Electric           Thermojet          SOP System            14,770         9,794         382     24
McLeod Farms                          COMPAQ            Servers              67,175        56,318       1,685     31
Boeing Satellite Systems               SUN       (10)280R Sparclil 750       53,614        53,614       1,409     36
Kaiser                                 IBM             (1) Server             4,864         4,961         385     36
Capital Technology                   Various            Servers              75,687        75,687       2,069    24-36
Capital Technology                   Various            Servers              68,952        68,952       2,021    25-37
America Online                         SUN              Servers             434,387       283,067       7,720     35
GE Medical                             IBM              Printers             10,979        11,199         295     36
Thomson Consumer Electric              LEX         (2)PL4630 Printers        46,547        47,478       1,271     36
Raytheon                              Compaq             Server             215.215       154,103       6,642     24
ITT Night Vision                       Dell           Workstations           33,782        15,790         983     14
ITT Night Vision                       Dell           Workstations           45,071        29,832       1,320     22
Vatterott Educational                 Intel           Workstations           16,257        14,349         467     30
Keller Group                           Dell           Workstations            4,381         4,553         249     17
GE Medical                             Sun              Servers              12,459        10,000         261     36
</TABLE>

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.

                                       12
<PAGE>

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 that 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 a related party, CCC, which has 26 employees as of December 31,
2002.

                                       13
<PAGE>

ITEM 2:  PROPERTIES

                  NOT APPLICABLE

ITEM 3:  LEGAL PROCEEDINGS

                  On or about May 8, 2000, a complaint captioned Commonwealth
                  Capital Corp V. Getronics, Inc. was filed by Commonwealth
                  Capital Corp against Getronics, Inc. (formerly known as Wang
                  Laboratories, Inc.) with the Federal District Court of the
                  Eastern District of Pennsylvania, No. 00-CV-2381 on behalf of
                  the Partnership. The complaint alleges that the named
                  defendant has not returned the proper equipment stated in the
                  master lease agreement and is seeking restitution for lost
                  monthly rentals, taxes, attorney fees and costs, plus
                  interest.

                  The defendant filed for a Summary Judgment on February 20,
                  2001, and the plaintiff has filed an opposition to this
                  Summary Judgment. On September 29, 2001, the Federal District
                  Court of the Eastern District of Pennsylvania denied the
                  defendant's request for Summary Judgment. As of March 29,
                  2002, the pre-trial conference was completed. On February 13,
                  2003, the Federal District Court of the Eastern District of
                  Pennsylvania has assigned a trial date of May 14, 2003.

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, 2002, there were 741 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.

                                       14
<PAGE>

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 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 requests 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, 2002, the General Partner
has not redeemed any Units. Additionally, no Limited Partners have requested
redemption of their Units.

                                       15
<PAGE>

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 sub partnership);

         (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.

ALLOCATION AND DISTRIBUTION BETWEEN THE GENERAL PARTNER AND THE LIMITED PARTNERS

         Cash distributions, if any, are made quarterly on March 31, June 30,
and September 30, and December 31, 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.

                                       16
<PAGE>

         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 excess will reduce
the Adjusted Capital Contributions, 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 38.6%
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 paid to the
Limited Partners during 2002, 2001 and 2000.

         Quarter Ended              2002         2001          2000
         ---------------------   ----------   ----------   -----------

         March 31                $        -   $  156,205   $   242,529

         June 30                          -      156,205       466,259

         September 30                     -            -       156,205

         December 31                      -            -       156,207
                                 ----------   ----------   -----------

                                 $      -0-   $  312,410   $ 1,021,200
                                 ==========   ==========   ===========

                                       17
<PAGE>

ALLOCATIONS AND DISTRIBUTIONS AMONG THE LIMITED PARTNERS

         Except during the Offering Period, Cash Available for Distribution that
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, selected financial
data for the Partnership as of and for each of the five years ended December 31,
2002. 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.

                                       18
<PAGE>

<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                                  -----------------------
                                        2002                 2001              2000                1999                1998
------------------------------- ---------------- ------------------- ------------------ ------------------- -------------------
<S>                                 <C>                   <C>              <C>                 <C>                 <C>
Lease Income                        $  405,772            $ 764,635        $ 1,790,339         $ 2,995,506         $ 4,527,348

Net (Loss) / Income                   (237,111)             170,529           (205,279)           (478,168)           (334,254)

Cash Distributions                           -              315,490          1,031,324             959,043           1,275,467

Net (Loss)/Income Per Limited             (.38)                 .27               (.34)               (.77)               (.55)
Partner Unit

Cash Distribution Per Limited                -                  .50               1.62                1.50                2.02
Partner Unit
------------------------------- ---------------- ------------------- ------------------ ------------------- -------------------
</TABLE>

<TABLE>
<CAPTION>
                                                           AS OF DECEMBER 31,
                                                    -----------------------------
                               2002             2001              2000              1999             1998
------------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S>                         <C>             <C>                 <C>             <C>               <C>
Total Assets                $968,125        $1,108,320          $839,551        $2,858,500        $5,906,884

Notes Payable                444,732           500,585            67,647           716,792         2,401,080

Partners' Capital            201,160           438,271           583,232         1,819,835         3,257,046
------------------- ----------------- ----------------- ----------------- ----------------- -----------------
</TABLE>

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

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

CRITICAL ACCOUNTING POLICIES

         Financial Reporting Release No. 60, which was recently released by the
Securities and Exchange Commission, requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. Our significant accounting policies are described in Note
1 of the Notes to the Financial Statements. The significant accounting policies
that we believe are the most critical to aid in fully understanding our reported
financial results include the following:

                                       19
<PAGE>

COMPUTER EQUIPMENT

         CCC, on behalf of the Partnership and other affiliated partnerships,
acquires computer equipment subject to associated debt obligations and lease
agreements and allocates a participation in the cost, debt and lease revenue to
the various partnerships based on certain risk factors.

REVENUE RECOGNITION

         Through December 31, 2002, the Partnership's leasing operations consist
substantially of operating leases and one direct financing lease. Operating
lease revenue is recognized on a monthly basis in accordance with the terms of
the lease agreement. Unearned revenue from direct financing agreements is
amortized to revenue over the lease term.

         The Partnership reviews a customer's credit history before extending
credit and establishes a provision for uncollectible accounts receivable based
upon the credit risk of specific customers, historical trends and other
information.

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 impairment exists by estimating the undiscounted
cash flows to be generated by each asset. If the estimated undiscounted cash
flows are less than the carrying value of the asset then impairment exists. The
amount of the impairment is determined based on the difference between the
carrying value and the fair value. Fair value is determined based on estimated
discounted cash flows to be generated by the asset.

         Depreciation on computer equipment for financial statement purposes is
based on the straight-line method over estimated useful lives of four years.

LIQUIDITY AND CAPITAL RESOURCES

         For the year ended December 31, 2002, the Partnership used cash flow
from operating activities of $2,000, which includes a loss of $237,000, and gain
from the sale of computer equipment of $18,000, and was reduced by depreciation
and amortization expenses of $304,000. Other noncash activities included in the
determination of the net income include direct payments of lease income by
lessees to banks of $276,000.

         The Partnership's primary sources of capital for the years ended
December 31, 2002, 2001 and 2000 were cash from operations of $257,000 and
$513,000 for 2001 and 2000, respectively, and proceeds from the sale of computer
equipment of $24,000, $230,000, and $365,000 in 2002, 2001 and 2000,
respectively. The primary uses of cash for the year ended December 31, 2002 was
$2,000 used in operations and capital expenditures for new equipment totaling
$25,000 and $199,000 for the years ended December 31, 2002 and 2001,
respectively, and for the payment of distributions to partners totaling $315,000
for 2001 and $1,031,000 for 2000. There were no distributions paid in 2002 due
to the litigation with Getronics.

                                       20
<PAGE>

         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.

         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. As
of December 31, 2002, future minimum rentals on noncancellable operating and
capital leases decreased to $545,000, down from $760,000 in 2001, but up from
$88,000 in 2000, due to the fact that more lease agreements have expired than
new computer equipment leases acquired in 2002, but up from 2000 because of
lease agreements acquired since then. This industry has experienced a decrease
in lease rates during 2002 due to an ongoing decrease in interest rates. As of
December 31, 2002, the Partnership had future minimum rentals on noncancellable
operating leases of $322,000 for the year ended 2003 and $181,000 thereafter. As
of December 31, 2002, the Partnership had future minimum rentals on
noncancellable capital leases of $12,000 for the year ended 2003 and $30,000
thereafter. The Partnership incurred debt in 2002 in the amount of $204,000,
down from $544,000 in 2001. No debt was incurred in 2000. At December 31, 2002,
the outstanding debt was $445,000, with a weighted average interest rate of
7.37% and will be payable through June 2006. The Partnership intends to continue
purchasing additional computer equipment when future cash becomes available from
future lease rentals and sales proceeds. In addition, the Partnership may incur
debt in purchasing computer equipment in the future.

         CCC, on behalf of the Partnership and other affiliated partnerships,
acquires computer equipment subject to associated debt obligations and lease
agreements and allocates a participation in the cost, debt and lease revenue to
the various partnerships based on certain risk factors. The Partnership's share
of the computer equipment in which they participate at December 31, 2002 and
2001 is approximately $519,000 and $469,000, respectively, which is included in
the Partnership's fixed assets on their balance sheet, and the total cost of the
equipment shared by the Partnership with other partnerships at December 31, 2002
and 2001 was approximately $2,967,000 and $2,867,000, respectively. The
Partnership's share of the outstanding debt associated with this equipment at
December 31, 2002 and 2001 is approximately $272,000 and $387,000, respectively,
which is included in the Partnership's liabilities on the balance sheet, and the
total outstanding debt at December 31, 2002 and 2001 related to the equipment
shared by the Partnership was approximately $1,587,000 and $2,338,000,
respectively.

         The Partnership's cash flow from operations is expected to continue to
be adequate to cover all operating expenses, liabilities, and 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.

                                       21
<PAGE>

RESULTS OF OPERATIONS

         For the year ended December 31, 2002, 2001 and 2000, the Partnership
recognized income of $443,000, $954,000, and $1,797,000, and expenses of
$680,000, $784,000, and $2,002,000, resulting in net loss of $237,000 in 2002,
net income of $170,000 in 2001, and a net loss of $205,000 in 2000.

         Lease income decreased to $406,000 in 2002, down from $765,000 and
$1,790,000 in 2001 and 2000, respectively, primarily due to the fact that more
lease agreements terminated than new lease agreements entered into since
September 30, 2001. The partnership has stopped recording revenue on its
Gtronics lease arrangement. This is due to the fact that the defendant (see
Legal Proceedings in Part I, Item 3) has not returned the proper equipment as
defined in the master lease agreement.

         Interest income decreased to $2,000 and $7,000 in 2001 and 2000,
respectively, as a result of rental income being used to purchase additional
computer equipment as well as paying distributions to the partners. There was no
interest income in 2002.

         The Partnership sold computer equipment with a net book value of
$6,000, $44,000, and $484,000 during the years ended December 31, 2002, 2001 and
2000, respectively, for a net gain of $18,000 and $185,000 for the years ended
December 31, 2002 and 2001, respectively, and a net loss of $118,000 for the
year ended December 31, 2000.

         Operating expenses, excluding depreciation, consist of accounting,
legal, outside service fees and reimbursement of expenses to CCC for
administration and operation of the Partnership. The operating expenses totaled
approximately $291,000 in 2002, $221,000 in 2001, and $193,000 in 2000. There
was an increase in reimbursable expenses with the administration and operation
of the Partnership charged by CCC, a related party, of approximately $54,000, an
increase in insurance of approximately $2,000, an increase in postage fees of
approximately $3,000, an increase in due diligence expense of approximately
$2,000, an increase in equipment repairs of $1,000, and an increase in general
office expenses of approximately $3,000.

         The equipment management fee is equal to approximately 5% of the gross
lease revenue attributable to equipment, which is subject to operating and
capital leases. The equipment management fee was $20,000 in 2002, down from
$38,000 in 2001 and $90,000 in 2000, which is consistent with the decrease in
lease income.

         Interest expense increased to $40,000 in 2002, up from $11,000 and
$22,000 in 2001 and 2000, respectively, as a result of new leases with
associated debt obligations being acquired late in the third and fourth quarters
of 2001, and new leases with associated debt obligations being acquired in early
2002.

                                       22
<PAGE>

         Depreciation and amortization expenses consist of depreciation on
computer equipment, equipment acquisition fees and debt placement fees.
Depreciation and amortization during 2002 decreased to $304,000, down from
$413,000 and $1,476,000 in 2001 and 2000, respectively, due to the older
equipment becoming fully depreciated and certain acquisition and finance fees
being fully amortized and only a small amount of new additions.

         The Partnership has charged bad debt expense of $ 25,000, $100,000, and
$104,000 as additional allowances against accounts receivable for the periods
ending December 31, 2002, 2001 and 2000, respectively.

         The Partnership identified specific computer equipment and associated
equipment acquisition costs, which were reevaluated due to technological
changes. The Partnership determined that no impairment had occurred for the
years ended December 31, 2002, 2001 and 2000.

NET INCOME (LOSS)

         Net income (loss) decreased in 2002 to a net loss of $237,000, down
from net income of $170,000 in 2001 and a net loss of $205,000 in 2000.

         The changes in net income (loss) were attributable to the changes in
revenues and expenses as discussed above.

                        RECENT ACCOUNTING PRONOUNCEMENTS

                                     FIN 45

         In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, including Indirect
Guarantees of Indebtedness of Others" ("Interpretation No. 45"). This
Interpretation elaborates on the existing disclosure requirements for most
guarantees, including loan guarantees such as standby letters of credit. It also
clarifies that at the time a company issues a guarantee, the company must
recognize an initial liability for the fair market value of the obligations it
assumes under that guarantee and must disclose that information in its interim
and annual financial statements. The initial recognition and measurement
provisions of Interpretation No. 45 apply on a prospective basis to guarantees
issued or modified after December 31, 2002. The adoption of Interpretation No.
45 is not expected to have a material impact on the Company's results of
operations, financial position or cash flows.

                                    SFAS 144

         In August 2001, the FASB issued Statement No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This Statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets and
supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of. However, the Statement retains the
fundamental provisions of Statement 121 for (a) recognition and measurement of
the impairment of long-lived assets to be held and used and (b) measurement of
long-lived assets to be disposed of by sale.

                                       23
<PAGE>

         This Statement supersedes the accounting and reporting provisions of
APB Opinion No. 30, Reporting the Results of Operations-Reporting the Effects of
Disposal of a Segment of a business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions, for the disposal of a segment of a business.
However, this Statement retains the requirement of Opinion 30 to report
discontinued operations separately from continuing operations and extends that
reporting to a component of an entity that either has been disposed of (by sale,
by abandonment, or in distribution to owners) or is classified as held for sale.
This Statement also amends ARB No. 51, Consolidated Financial Statements, to
eliminate the exception to consolidation for a temporarily controlled
subsidiary.

         The provisions of this Statement are effective for financial statements
issued for fiscal years beginning after December 15, 2001, and interim periods
within those fiscal years, with earlier application encouraged. The provisions
of this Statement generally are to be applied prospectively. The adoption of the
Statement on January 1, 2002, did not have a material impact on earnings

                                    SFAS 146

         On July 30, 2002, the FASB issued FASB Statement No. 146, Accounting
for Costs Associated with Exit or Disposal Activities, which nullifies EITF
Issues No. 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
an a Restructuring)" and No. 88-10, Costs Associated with Lease Modification or
Termination." Statement 146 fundamentally changed how a company should account
for future "restructurings." The Partnership believes that the adoption of SFAS
146 will not have an impact on its financial position and results of 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 and its associated fixed
revenue streams.

ITEM 8:  FINANCIAL STATEMENTS

         See financial statements commencing in part IV Item 14.

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

         NONE

                                       24
<PAGE>

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 CCC., a Pennsylvania corporation, was incorporated in Pennsylvania
on August 26, 1993. The General Partner also acts as the General Partner for
Commonwealth Income and Growth Fund I and Commonwealth Income and Growth Fund
II. The principal business office of the General Partner is 470 John Young Way,
Suite 300, Exton, PA 19341, and its telephone number is 610-594-9600. 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.

         The directors and officers of the General Partner and key employees of
CCC are as follows:

NAME                        TITLE
----                        -----

George S. Springsteen       Chairman of the Board of Directors and President of
                            the General Partner and CCC

Kimberly A. Springsteen     Executive Vice President, Chief Operating Officer
                            and Secretary of the General and Partner CCC

Henry J. Abbott             Senior Vice President and Portfolio Manager of CCC

Salvatore R. Barila         Vice President and Controller of the General Partner
                            and CCC

Lynn Franceschina           Vice President and Accounting Manager of the General
                            Partner and CCC

Dorothy A. Ferguson         Assistant Vice President of CCC

         George S. Springsteen, age 68, is President of both CCC and the General
Partner. Mr. Springsteen is also President of the general partners or
controlling entities of several prior programs sponsored by CCC with objectives
similar to the Partnership's. He has been the sole shareholder and director of
CCC 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 CCC in
May of 1978. Mr. Springsteen received a Bachelor of Science degree from the
University of Delaware in 1957.

                                       25
<PAGE>

         Kimberly A. Springsteen, age 43, is Executive Vice President, Chief
Operating Officer and Secretary of CCC and the General Partner and joined CCC in
1997. She is also the President of Commonwealth Capital Securities Corp. From
1980 to 1997, Ms. Springsteen was employed with Wheat First Butcher Singer, a
broker/dealer headquartered in Richmond, Virginia. While at Wheat First Butcher
Singer, Ms. Springsteen, 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.
Springsteen 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.

         Henry J. Abbott, age 52, is Senior Vice President and Portfolio Manager
of CCC and has been employed by CCC since 1998. Mr. Abbot has been active in the
commercial lending industry, working primarily on asset-backed transactions for
more than twenty-seven years. Prior to joining CCC 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 where 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.

         Salvatore R. Barila, age 32, is Vice President and Controller of the
General Partner and CCC and certain of its subsidiaries where he has been
employed since 2000. From 1992 to 2000, Mr. Barila was employed as Corporate
Accounting Manager of RCG Information Technology, Inc. Mr. Barila received a
B.B.A. degree in Accounting from Pace University in 1992. Mr. Barila is a member
of the Equipment Leasing Association.

         Lynn A. Franceschina, age 31, is Vice President and Accounting Manager
of the General Partner and CCC and certain of its subsidiaries where she has
been employed since 2001. From 1991 to 2001, Ms. Franceschina worked as an
Accountant, most recently as the Business Controls Manager at Liquent, Inc. Ms.
Franceschina received a B.S.B.A. degree from Robert Morris College. Ms.
Franceschina is a member of the Equipment Leasing Association.

         Dorothy A. Ferguson, age 60, is Assistant Vice President of CCC and has
been employed by CCC since 1995. She brought with her over 20 years experience
in commercial banking and finance. Prior to joining Commonwealth, she held
positions as a Banking Officer and Administrative Assistant to the Chairman of a
large Philadelphia based bank, as well as Executive Secretary to the CEO of an
international manufacturing management group.

         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 summarizes the types, amounts and recipients of
compensation to be 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 that 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.

                                       26
<PAGE>

<TABLE>
<CAPTION>
                                                               AMOUNT           AMOUNT            AMOUNT
 ENTITY RECEIVING                                             INCURRED         INCURRED          INCURRED
   COMPENSATION      TYPE OF COMPENSATION                   DURING 2002       DURING 2001       DURING 2000
<S>                  <C>                                     <C>                <C>               <C>
                     OFFERING AND ORGANIZATION STAGE

The General Partner  Organizational Fee.  An                       $0                $0                $0
                     Organization Fee equal to three
                     percent of the first $10,000,000
                     of Limited Partners' Capital
                     Contributions and two percent of
                     the Limited Partners' Capital
                     Contribution in excess of
                     $10,000,000, as compensation for
                     the organization of the
                     Partnership. It is anticipated
                     that all Organizational and
                     Offering Expenses which include
                     legal, accounting and printing
                     expenses; various registration
                     and filing fees; miscellaneous
                     expenses related to the
                     organization and formation of
                     the Partnership; other costs of
                     registration; and costs incurred
                     in connection with the
                     preparation, printing and
                     distribution of this Report and
                     other sales literature. The
                     General Partner pays all
                     Organizational and Offering
                     Expenses, other than
                     Underwriter's Commissions and a
                     non-accountable expense
                     allowance payable to the Dealer
                     Manager that is equal to the
                     lesser of (i) one percent of the
                     Offering proceeds or (ii)
                     $50,000.

                          OPERATIONAL AND SALE
                          OR LIQUIDATION STAGES

The General Partner  Equipment Acquisition Fee. An             $9,000           $30,000                $0
                     Equipment Acquisition Fee of
                     four percent of the Purchase
                     Price of each item of Equipment
                     purchased as compensation for
                     the negotiation of the
                     acquisition of the Equipment and
                     the lease thereof or sale under
                     a Conditional Sales Contract.
                     The fee was paid upon each closing
                     of the Offering with respect to
                     the Equipment purchased by the
                     Partnership with the net proceeds
                     of the Offering available for
                     investment in Equipment. If the
                     Partnership acquires Equipment in
                     an amount exceeding the net
                     proceeds of the Offering available
                     for investment in Equipment, the
                     fee will be paid when such
                     Equipment is acquired.
</TABLE>

                                       27
<PAGE>

<TABLE>
<S>                  <C>                                     <C>                <C>               <C>
The General          Reimbursement of Expenses. The          $136,000           $82,000           $76,000
Partner and its      General and its Affiliates
Affiliates           Partner are entitled to
                     reimbursement by the Partnership
                     for the cost of goods, supplies or
                     services obtained and used by the
                     General Partner in connection with
                     the administration and operation
                     of the Partnership from third
                     parties unaffiliated with the
                     General Partner. In addition, the
                     General Partner and its affiliates
                     are entitled to reimbursement of
                     certain expenses incurred by the
                     General Partner and its affiliates
                     in connection with the
                     administration and operation of
                     the Partnership. The amounts set
                     forth on this table do not include
                     expenses incurred in the offering
                     of Units.

The General Partner  Debt Placement Fee. As                    $2,000            $5,000                $0
                     compensation for arranging Term
                     Debt to finance the acquisition
                     of Equipment to the Partnership,
                     a fee equal to one percent of such
                     indebtedness; provided, however,
                     that such fee is reduced to the
                     extent the Partnership incurs such
                     fees to third Parties, un
                     affiliated with the General
                     Partner or the lender, with
                     respect to such indebtedness and
                     no such fee is paid with respect
                     to borrowings from the General
                     Partner or its Affiliates.

The General Partner  Equipment Management Fee. A              $20,000           $38,000           $90,000
                     monthly fee equal to the lesser
                     of (I) the fees which would be
                     charged by an independent third
                     party for similar services for
                     similar equipment or (ii) the
                     sum of (a) two percent of (1)
                     the Gross Lease Revenues
                     attributable to Equipment which
                     is subject to Full Payout Net
                     Leases which contain net lease
                     provisions plus (2) the purchase
                     price paid on Conditional Sales
                     Contracts as received by the
                     Partnership and (b) five percent
                     of the Gross Lease Revenues
                     attributable to Equipment which
                     is subject to Operating Leases.

The General          Re-Lease Fee. As Compensation                 $0                $0                $0
Partner              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 of Conditional
                     Sales Contract, arranged a
                     subsequent lease of
                     Conditional Sales Contract for
                     the use of such Equipment to a
                     lessee or other party, other
                     than the current or most
                     recent lessee of other
                     operator of such equipment or
                     its Affiliates ("Re-lease"),
                     the General Partner will
                     receive, on a monthly basis, a
                     Re3-lease Fee equal to the
                     lesser of (a) the fees which
                     would be charged by an
                     independent third party of
                     comparable services for
                     comparable equipment or (b)
                     two percent of Gross Lease
                     Revenues derived from such
                     Re-lease.

The General Partner  Partnership Interest. The                     $0            $3,080           $10,124
                     General Partner has a present
                     and continuing one percent
                     interest of $1,000 in the
                     Partnership's item of income,
                     gain, loss, deduction, credit,
                     and tax preference. In addition,
                     the General Partner receives
                     one percent of Cash Available
                     for Distribution until the
                     Limited Partners have received
                     distributions of Cash
                     Available for Distribution
                     equal to their Capital
                     Contributions plus the 10%
                     Priority Return and
                     thereafter, the General
                     Partner will receive 10% of
                     Cash Available for
                     Distribution.
</TABLE>

                                       28
<PAGE>

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 of 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.

         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

         CCC 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 CCC, the General Partner or such other Affiliate as disclosed in this
Report. CCC, 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. CCC, 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 CCC.

                                       29
<PAGE>

         In certain instances, the Partnership may find 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 that
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) the 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 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.

                                       30
<PAGE>

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.

"Capital Leases" are leases under which the Equipment either transfers to the
lessee at the end of the lease term, contains a bargain purchase price option,
the lease term is equal to 75% or more of the estimated economic life of the
Equipment, or the present value at the beginning of the lease term of the
minimum lease payments is equal to or exceeds 90% of the excess of the fair
value of the Equipment.

                                       31
<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.

                                       32
<PAGE>

"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.

"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.

                                       33
<PAGE>

"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.

"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.

                                       34
<PAGE>

"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 FORM 10-K

(a) (1)  Financial Statements

         Commonwealth Income & Growth Fund I

         Report of Independent Certified Public Accountant

         Balance Sheets as of December 31, 2002 and 2001

         Statements of Operations for each of the three years ended December 31,
         2002, 2001 and 2000

         Statements of Partners' Capital for each of the three years ended
         December 31, 2002, 2001 and 2000

         Statements of Cash Flows for each of the three years ended December 31,
         2002, 2001 and 2000

         Notes to Financial Statements

                                       35
<PAGE>

         Commonwealth Income & Growth Fund, Inc.

         Report of Independent Auditor

         Balance sheet as of February 28, 2002

         Notes to Balance Sheet

         Commonwealth Capital Corp.

         Report of Independent Auditor

         Consolidated Balance Sheet as of February 28, 2002

         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. 333-26933)

         **       Incorporated by reference from the Partnership's Annual Report
                  on 10-K for the year ended December 31, 1993

(b)      Reports on Form 8-K

(c)      Exhibits.

                                       36
<PAGE>

               99.1 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Commonwealth Income & Growth Fund I,
(the "Company") on Form 10-K for the period ending December 31, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, George S. Springsteen, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

         (1)      The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)      The information contained in the Report fairly presents, in
all material respects, the financial condition and result of operations of the
Company.

/s/ GEORGE S. SPRINGSTEEN
-------------------------
George S. Springsteen
Chief Executive Officer
March 31, 2003

               99.2 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Commonwealth Income & Growth Fund I,
(the "Company") on Form 10-K for the period ending December 31, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
Kimberly A. Springsteen, Principal Financial Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

         (1)      The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)      The information contained in the Report fairly presents, in
all material respects, the financial condition and result of operations of the
Company.

/s/ KIMBERLY A. SPRINGSTEEN
---------------------------
Kimberly A. Springsteen
Principal Financial Officer
March 31, 2003

                                       37
<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 March 31, 2003 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, 2003

SIGNATURE                           CAPACITY
---------                           --------

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

/s/ KIMBERLY A. SPRINGSTEEN         Executive Vice President Chief Operating
---------------------------         Officer and Secretary
Kimberly A. Springsteen

                                 CERTIFICATIONS

I, George Springsteen certify that:

1.       I have reviewed this annual report on Form 10-K of Commonwealth Income
& Growth Fund I (the Registrant);

2.       Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

                                       38
<PAGE>

3.       Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4.       The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:


         a) designed such disclosure controls and procedures to ensure the
         material information relating to the Registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

         b) evaluated the effectiveness of the Registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this annual report (the" Evaluation Date"); and

         c) presented in this annual report our conclusions about the
         effectiveness of the disclosure controls and the procedures based on
         our evaluation as of the Evaluation Date;

5.       The Registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the Registrant's auditors and the audit
committee of the Registrant's board of directors ( or persons performing the
equivalent function):

         a) all significant deficiencies in the design or the operation of
         internal controls which could adversely affect the Registrant's ability
         to record, process, summarize and report financial data we have
         identified for the Registrant's auditors any material weakness in
         internal controls; and

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the Registrant's
         internal controls; and

6.       The Registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

/s/  GEORGE S. SPRINGSTEEN
--------------------------
George S. Springsteen
Chief Executive Officer
March 31, 2003

                                       39
<PAGE>

I, Kimberly A. Springsteen, certify that:

1.       I have reviewed this annual report on Form 10-K of Commonwealth Income
& Growth Fund I (the Registrant);

2.       Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.       Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4.       The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

         a) designed such disclosure controls and procedures to ensure the
         material information relating to the Registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

         b) evaluated the effectiveness of the Registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this annual report (the" Evaluation Date"); and

         c) presented in this annual report our conclusions about the
         effectiveness of the disclosure controls and the procedures based on
         our evaluation as of the Evaluation Date;

5.       The Registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the Registrant's auditors and the audit
committee of the Registrant's board of directors (or persons performing the
equivalent function):

         a) all significant deficiencies in the design or the operation of
         internal controls which could adversely affect the Registrant's ability
         to record, process, summarize and report financial data we have
         identified for the Registrant's auditors any material weakness in
         internal controls; and

                                       40
<PAGE>

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the Registrant's
         internal controls; and

6.       The Registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

/s/  KIMBERLY A. SPRINGSTEEN
----------------------------
Kimberly A. Springsteen
Principal Financial Officer
March 31, 2003

                                       41

<PAGE>

                               Commonwealth Income
                                 & Growth Fund I

                  Years Ended December 31, 2002, 2001 and 2000

<PAGE>

                               Commonwealth Income
                                 & Growth Fund I

                              Financial Statements
                  Years Ended December 31, 2002, 2001 and 2000

<PAGE>

                       Commonwealth Income & Growth Fund I

                                     Contents

         Report of Independent Certified Public Accountants                   3

         Financial statements

                  Balance sheets                                            4-5
                  Statements of operations                                    6
                  Statements of partners' capital                             7
                  Statements of cash flows                                  8-9

         Notes to financial statements                                     10-23

                                        2
<PAGE>

Report of Independent Certified Public Accountants

The Partners
Commonwealth Income & Growth Fund I
Exton, Pennsylvania

We have audited the accompanying balance sheets of Commonwealth Income & Growth
Fund I as of December 31, 2002 and 2001, and the related statements of
operations, partners' capital, and cash flows for each of the three years in the
period ended December 31, 2002. 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
in the United States. Those standards require that we plan and perform the
audits 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, 2002 and 2001, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2002, in
conformity with generally accepted accounting principles in the United States.

                                                    /s/ BDO Seidman, LLP

Philadelphia, Pennsylvania
March 7, 2003

                                        3
<PAGE>

<TABLE>
<CAPTION>
December 31,                                                            2002           2001
------------------------------------------------------------------   -----------    -----------
<S>                                                                  <C>            <C>
Assets
Cash and cash equivalents                                            $       438    $     1,082
Lease income receivable, net of reserves of $314,164 for
 2002, and $299,578 for 2001                                             250,141        300,956
Net investment in direct financing lease                                  31,620              -
Accounts Receivable - Commonwealth Capital Corp                                -         17,904
Other receivables and deposits                                               200            200
                                                                     -----------    -----------
                                                                         282,399        320,142
                                                                     -----------    -----------
Computer equipment, at cost                                            2,669,518      3,312,836
Accumulated depreciation                                              (2,009,051)    (2,556,037)
                                                                     -----------    -----------
                                                                         660,467        756,799
                                                                     -----------    -----------
Equipment acquisition costs and deferred expenses, net of
  accumulated amortization of $21,099 and $5,358,
  respectively                                                            25,259         31,379
                                                                     -----------    -----------
Total assets                                                         $   968,125    $ 1,108,320
                                                                     ===========    ===========
</TABLE>

                                       4

<PAGE>

                       Commonwealth Income & Growth Fund I

                                 Balance Sheets

December 31,                                                 2002         2001
------------------------------------------------------   ----------   ----------
Liabilities and Partners' Capital
Liabilities
     Accounts payable                                    $    5,184   $   30,013
     Accounts payable, General Partner                      153,113       29,924
     Accounts payable, Commonwealth Capital Corp.            17,641            -
     Accounts payable, affiliated limited partnerships      126,526      105,886
     Unearned lease income                                   19,769        3,641
     Notes payable                                          444,732      500,585
                                                         ----------   ----------
Total liabilities                                           766,965      670,049
                                                         ----------   ----------
Partners' capital
     General Partner                                          1,000        1,000
     Limited partners                                       200,160      437,271
                                                         ----------   ----------
Total partners' capital                                     201,160      438,271
                                                         ----------   ----------
Total liabilities and partners' capital                  $  968,125   $1,108,320
                                                         ==========   ==========

                                 See accompanying notes to financial statements.

                                        5
<PAGE>

                       Commonwealth Income & Growth Fund I

                            Statements of Operations

<TABLE>
<CAPTION>
Year ended December 31,                                                2002          2001          2000
-----------------------------------------------------------        ----------    ----------    ----------
<S>                                                                <C>           <C>           <C>
Income
     Lease                                                         $  405,772    $  764,635    $1,790,339
     Interest and other                                                19,334         4,156         6,722
     Gain on sale of computer equipment                                17,628       185,549             -
                                                                   ----------    ----------    ----------

Total income                                                          442,734       954,340     1,797,061
                                                                   ----------    ----------    ----------

Expenses
     Operating, excluding depreciation                                290,736       221,147       192,622
     Equipment management fee, General Partner                         20,289        38,232        89,517
     Interest                                                          39,803        11,121        22,242
     Depreciation                                                     287,151       402,199     1,433,902
     Amortization of equipment acquisition costs, and
         deferred expenses                                             17,301        11,281        41,842
     Provision for uncollectible accounts receivable                   24,565        99,831       103,818
     Loss on sale of computer equipment                                     -             -       118,397
                                                                   ----------    ----------    ----------
Total expenses                                                        679,845       783,811     2,002,340
                                                                   ----------    ----------    ----------
Net (loss) income                                                  $ (237,111)   $  170,529    $ (205,279)
                                                                   ==========    ==========    ==========
Net (loss) income per equivalent limited
 partnership unit                                                  $     (.38)   $      .27    $     (.34)
                                                                   ----------    ----------    ----------
Weighted average number of equivalent
 limited partnership units outstanding
 during the year                                                      631,124       631,124       631,358
                                                                   ==========    ==========    ==========
</TABLE>

                                 See accompanying notes to financial statements.

                                        6
<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>
Balance, December 31, 1999                    50       631,538    $     1,000    $ 1,818,835    $ 1,819,835
Net income (loss)                              -             -         10,124       (215,403)      (205,279)
Distributions                                  -             -        (10,124)    (1,021,200)    (1,031,324)
                                         -------    ----------    -----------    -----------    -----------
Balance, December 31, 2000                    50       631,358          1,000        582,232        583,232
Net income                                     -             -          3,080        167,449        170,529
Adjustment                                     -          (234)             -              -              -
Distributions                                  -             -         (3,080)      (312,410)      (315,490)
                                         -------    ----------    -----------    -----------    -----------
Balance, December 31, 2001                    50       631,124          1,000        437,271        438,271
Net (loss)                                     -             -              -       (237,111)      (237,111)
                                         -------    ----------    -----------    -----------    -----------
Balance, December 31, 2002                    50       631,124    $     1,000    $   200,160    $   201,160
                                         =======    ==========    ===========    ===========    ===========
</TABLE>

                                 See accompanying notes to financial statements.

                                        7
<PAGE>

                       Commonwealth Income & Growth Fund I

                            Statements of Cash Flows

<TABLE>
<CAPTION>
Year ended December 31,                                             2002             2001             2000
-------------------------------------------------------------  --------------   --------------     ------------
<S>                                                            <C>              <C>                <C>
Cash flows from operating activities
     Net (loss) income                                         $     (237,111)  $      170,529     $   (205,279)
     Adjustments to reconcile net (loss) income to net
       cash provided by operating activities
          Depreciation and amortization                               304,452          413,480        1,475,744
          (Gain) loss on sale of computer
            equipment                                                 (17,628)        (185,549)         118,397
               Other noncash activities included in
                 determination of net (loss) income                  (273,464)        (111,180)        (649,145)
               Changes in assets and liabilities
                    (Increase) decrease in assets
                         Lease income receivable                       50,815            6,590          (94,922)
                         Other receivables and deposits                     -                -            1,809
                         Accounts receivable,
                              Commonwealth Capital Corp.                    -          (17,929)               -
                    (Decrease) increase in liabilities
                         Accounts payable                             (24,829)         (44,342)          20,318
                         Accounts payable, General
                              Partner                                 123,189           24,807          (29,901)
                         Accounts payable,
                              Commonwealth Capital Corp.               35,545                -          (29,263)
                         Accounts payable,
                              affiliated limited partnerships          20,640              215           28,171
                         Accrued expenses                                   -                -          (25,000)
                         Unearned lease income                         16,128              137          (97,526)
                                                               --------------   --------------     ------------
Net cash (used in) provided by operating activities                    (2,263)         256,758          513,403
                                                               --------------   --------------     ------------
</TABLE>

                                        8
<PAGE>

                       Commonwealth Income & Growth Fund I

                            Statements of Cash Flows

<TABLE>
<CAPTION>
Year ended December 31,                                             2002             2001             2000
---------------------------------------------------            --------------   --------------     ------------
<S>                                                            <C>              <C>                <C>
Cash flows from investing activities
     Capital expenditures                                      $      (25,000)  $     (199,304)    $          -
     Net proceeds from sale of computer
       equipment                                                       23,816          229,719          365,210
     Equipment acquisition fees to the General
       Partner                                                         (9,145)         (29,737)               -
                                                               --------------   --------------     ------------
Net cash (used in) provided by investing activities                   (10,329)             678          365,210
                                                               --------------   --------------     ------------
Cash flows from financing activities
     Proceeds from notes payable                                       13,984                -                -
     Distributions to partners                                              -         (315,490)      (1,031,324)
     Debt placement fee to the General
          Partner                                                      (2,036)          (5,441)               -
                                                               --------------   --------------     ------------
Net cash provided by (used in) financing activities                    11,948         (320,931)      (1,031,324)
                                                               --------------   --------------     ------------
Net (decrease) in cash and cash equivalents                              (644)         (63,495)        (152,711)
Cash and cash equivalents at beginning of year                          1,082           64,577          217,288
                                                               --------------   --------------     ------------
Cash and cash equivalents at end of year                       $          438   $        1,082     $     64,577
                                                               ==============   ==============     ============
</TABLE>

                                 See accompanying notes to financial statements.

                                        9
<PAGE>

                       Commonwealth Income & Growth Fund I

                          Notes to Financial Statements

1.       Business

Commonwealth Income & Growth Fund I (the "Partnership") is a limited partnership
organized in the Commonwealth of Pennsylvania to acquire, own and lease various
types of computer peripheral equipment and other similar capital equipment,
which will be leased primarily to U.S. corporations and institutions.
Commonwealth Capital Corp ("CCC"), on behalf of the Partnership and other
affiliated partnerships, acquires computer equipment subject to associated debt
obligations and lease agreements and allocates a participation in the cost, debt
and lease revenue to the various partnerships based on certain risk factors. The
Partnership's General Partner is Commonwealth Income & Growth Fund, Inc. (the
"General Partner"), a Pennsylvania corporation which is an indirect wholly owned
subsidiary of Commonwealth Capital Corp. Approximately ten to twelve years after
the commencement of operations, the Partnership intends to sell or otherwise
dispose of all of its computer equipment, make final distributions to partners,
and to dissolve. Unless sooner terminated, the Partnership will continue until
approximately December 31, 2006.

Allocations of income and distributions of cash are based on the Partnership's
Limited Partnership Agreement (the "Agreement"). The various allocations under
the Agreement prevent any limited partner's capital account from being reduced
below zero and ensure the capital accounts reflect the anticipated sharing
ratios of cash distributions, as defined in the Agreement. During 2002, the
Partnership did not make any distributions to the limited partners. During 2001,
the Partnership distributed to the limited partners $312,410. The 2001
distributions were at an annual rate of 2.4% of the limited partners' original
contributed capital. During 2000, the Partnership distributed to the limited
partners $781,097, in addition to $240,103 distributed in January 2000, which
pertained to the 1999 fourth quarter distribution. The 2000 distributions,
exclusive of the January 2000 distributions, were at an annual rate of 6.2% of
the limited partners' original contributed capital. Distributions during 2001
reflect an annual return of capital in the amount of approximately $0.50 per
limited partnership unit, for units which were outstanding for the entire year.
Distributions during 2000 reflect an annual return of capital in the amount of

                                       10
<PAGE>

approximately $1.62 per limited partnership unit, for units which were
outstanding for the entire year, which includes $.38 per unit which was
distributed in January 2000 for the fourth quarter of 1999.

2.       Summary of Significant Accounting Policies

Revenue Recognition

Through December 31, 2002, the Partnership's leasing operations consist
substantially of operating leases and one direct financing lease. Operating
lease revenue is recognized on a monthly basis in accordance with the terms of
the lease agreement. Unearned revenue from direct financing agreements is
amortized to revenue over the lease term.

The Partnership reviews a customer's credit history before extending credit and
establishes a provision for uncollectible accounts receivable based upon the
credit risk of specific customers, historical trends and other information.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

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

                                       11
<PAGE>

determined based on estimated discounted cash flows to be generated by the
asset. In 2002, 2001 and 2000, the Partnership determined that no impairment had
occurred.

Depreciation on computer equipment for financial statement purposes is based on
the straight-line method over estimated useful lives of four years.

Intangible Assets

Equipment acquisition costs and deferred expenses are amortized on a
straight-line basis over two- to-four year lives. Unamortized acquisition fees
and deferred expenses are charged to amortization expense when the associated
leased equipment is sold.

Cash and Cash Equivalents

The Partnership considers all highly liquid investments with a maturity of three
months or less to be cash equivalents. Cash equivalents have been invested in a
money market fund investing directly in Treasury obligations.

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, dealer manager fees,
professional fees and other offering expenses relating to the syndication.
Selling commissions were 7% of the

                                       12
<PAGE>

partners' contributed capital and dealer manager fees were 2% of the partners'
contributed capital. These costs have been deducted from partnership capital in
the accompanying financial statements.

Net Income (Loss) Per Equivalent Limited Partnership Unit

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

Reimbursable Expenses

Reimbursable expenses, which are charged to the Partnership by CCC in connection
with the administration and operation of the Partnership, are allocated to the
Partnership based upon several factors including, but not limited to, the number
of investors, compliance issues, and the number of existing leases.

                                       13
<PAGE>

Recent Accounting Pronouncements

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, including Indirect Guarantees of
Indebtedness of Others" ("Interpretation No. 45"). This Interpretation
elaborates on the existing disclosure requirements for most guarantees,
including loan guarantees such as standby letters of credit. It also clarifies
that at the time a company issues a guarantee, the company must recognize an
initial liability for the fair market value of the obligations it assumes under
that guarantee and must disclose that information in its interim and annual
financial statements. The initial recognition and measurement provisions of
Interpretation No. 45 apply on a prospective basis to guarantees issued or
modified after December 31, 2002. The adoption of Interpretation No. 45 is not
expected to have a material impact on the Company's results of operations,
financial position or cash flows.

In August 2001, the FASB issued Statement No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This Statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets and
supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of. However, the Statement retains the
fundamental provisions of Statement 121 for (a) recognition and measurement of
the impairment of long-lived assets to be held and used and (b) measurement of
long-lived assets to be disposed of by sale.

This Statement supersedes the accounting and reporting provisions of APB Opinion
No. 30, Reporting the Results of Operations-Reporting the Effects of Disposal of
a Segment of a business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions, for the disposal of a segment of a business. However,
this Statement retains the requirement of Opinion 30 to report discontinued
operations separately from continuing operations and extends that reporting to a
component of an entity that either has been disposed of (by sale, by
abandonment, or in distribution to owners) or is classified as held for sale.
This Statement also amends ARB No. 51, Consolidated Financial Statements, to
eliminate the exception to consolidation for a temporarily controlled
subsidiary.

The provisions of this Statement are effective for financial statements issued
for fiscal years beginning after December 15, 2001, and interim periods within
those fiscal years, with earlier application encouraged. The provisions of this
Statement generally are to be applied prospectively. The adoption of the
Statement on January 1, 2002, did not have a material impact on earnings.

                                       14
<PAGE>

3.       Net Investment in Direct Financing Lease

The following lists the components of the net investment in the direct financing
lease as of December 31, 2002 and 2001:

                                                         December 31,
                                                     ---------------------
                                                        2002      2001
                                                     ----------   --------
Minimum lease payments receivable                    $   42,126   $      -
Less: Unearned Revenue                                   10,506          -
                                                     ----------   --------
Net investment in direct financing
 lease                                               $   31,620          -
                                                     ==========   ========


The following is a schedule of future minimum rentals on noncancellable capital
leases at December 31, 2002:

                    Year ending December 31,                   Amount
                    ------------------------                 ----------

                              2003                           $  12,036

                              2004                              12,036

                              2005                              12,036

                              2006                               6,018
                                                             ---------
                                                             $  42,126
                                                             =========



                                       15
<PAGE>

4.       Computer Equipment

The Partnership is the lessor of equipment under operating leases with periods
ranging from 14 to 48 months. In general, associated costs such as repairs and
maintenance, insurance and property taxes are paid by the lessee.

The Partnership's share of the computer equipment in which they participate at
December 31, 2002 and 2001 is approximately $519,000 and $469,000, respectively,
which is included in the Partnership's fixed assets on their balance sheet, and
the total cost of the equipment shared by the Partnership with other
partnerships at December 31, 2002 and 2001 was approximately $2,967,000 and
$2,867,000, respectively. The Partnership's share of the outstanding debt
associated with this equipment at December 31, 2002 and 2001 is approximately
$272,000 and $387,000, respectively, which is included in the Partnership's
liabilities on the balance sheet, and the total outstanding debt at December 31,
2002 and 2001 related to the equipment shared by the Partnership was
approximately $1,587,000 and $2,338,000, respectively.

The following is a schedule of future minimum rentals on noncancelable operating
leases at December 31, 2002:

         Year ending December 31,               Amount
         ------------------------            ---------

              2003                           $ 322,000
              2004                             170,000
              2005                               8,000
              2006                               3,000
                                             ---------
                                             $ 503,000
                                             =========

Lease income from two lessees, each exceeding 10% of total lease income,
approximated 41% of lease income for the year ended December 31, 2002. Lease
income from one lessee, exceeding 10% of lease revenue, aggregated 21% of lease
income for the year ended December 31, 2001. Lease income from three lessees,
each exceeding 10% of lease revenue, aggregated 38% of lease income for the year
ended December 31, 2000.

                                       16
<PAGE>

As of December 31, 2002, one lessee comprised approximately 97% of the
Partnership's accounts receivable.

5.       Related Party Transactions

Reimbursement of Expenses

The General Partner and its affiliates are entitled to reimbursement by the
Partnership for the cost of supplies and services obtained and used by the
General Partner in connection with the administration and operation of the
Partnership from third parties unaffiliated with the General Partner. In
addition, the General Partner and its affiliates are entitled to reimbursement
for certain expenses incurred by the General Partner and its affiliates in
connection with the administration and operation of the Partnership. During
2002, 2001 and 2000, the Partnership recorded $136,000, $82,000 and $76,000,
respectively, for reimbursement of 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 lease thereof or sale under
a conditional sales contract. During 2002 and 2001, equipment acquisition fees
of approximately $9,000 and $30,000, respectively, were earned by the General
Partner. No fees were earned by the General Partner in 2000.

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 2002 and 2001, debt placement fees of approximately $2,000 and $5,000,
respectively, were earned by to the General Partner. No debt placement fees were
earned by the General Partner in 2000.

                                       17
<PAGE>

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 and
capital leases. During 2002, 2001 and 2000, equipment management fees of
approximately $20,000, $38,000 and $90,000, respectively, were earned by the
General Partner as determined pursuant to section (ii) above.

Release Fee

As compensation for providing releasing services for any equipment for which the
General Partner has, following the expiration of, or default under, the most
recent lease or conditional sales contract, arranged a subsequent lease or
conditional sales contract for the use of such equipment to a lessee or other
party, other than the current or most recent lessee or other operator of such
equipment or its affiliates ("Release"), the General Partner shall receive, on a
monthly basis, a Release Fee equal to the lesser of (a) the fees which would be
charged by an independent third party for comparable services for comparable
equipment or (b) two percent of gross lease revenues derived from such Release.
There were no such fees earned by the General Partner in 2002, 2001 and 2000.

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 earned by the General
Partner in 2002, 2001 and 2000.

                                       18
<PAGE>

6.       Notes Payable

Notes payable consisted of the following:

December 31,                                         2002            2001
----------------------------------------------   ------------    ------------

Installment notes payable to banks; interest
ranging from 7.50% to 9.50%; due in monthly
installments ranging from $182 to $1,320
including interest with final payments due
from January 2003 through November 2003.         $     20,977    $     12,584

Installment notes payable to banks; interest
ranging from 6.25% to 9.25%; due in monthly
installments ranging from $138 to $7,720
including interest with final payments due
from January 2004 through December 2004.              386,168         450,471

Installment note payable to a bank; interest
at 6.5%; due in monthly installments of $1,003
including interest through June 2006.                  37,587          37,530
                                                 ------------    ------------
                                                 $    444,732    $    500,585
                                                 ============    ============

                                       19
<PAGE>

These notes are secured by specific computer equipment and are nonrecourse
liabilities of the Partnership. Aggregate maturities of notes payable for each
of the years subsequent to December 31, 2002 are as follows:

         Year ending December 31,              Amount
         ------------------------            ---------
              2003                           $ 276,389
              2004                             151,185
              2005                              11,252
              2006                               5,906
                                             ---------
                                             $ 444,732
                                             =========

7.       Supplemental Cash Flow Information

Other noncash activities included in the determination of net loss are as
follows:

<TABLE>
<CAPTION>
Year ended December 31,                                    2002       2001       2000
-----------------------------------------------------   ---------  ---------  ---------
<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                 $ 273,464  $ 109,615  $ 649,145

Lease income paid to original lessor in lieu
 of cash payment for computer equipment acquired                -      1,565          -
                                                        ---------  ---------  ---------
     Total adjustment to net (loss) income from other
     noncash activities                                 $ 273,464  $ 111,180  $ 649,145
                                                        =========  =========  =========
</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.

                                       20
<PAGE>

Noncash investing and financing activities include the following:

<TABLE>
<CAPTION>
Year ended December 31,                                   2002        2001       2000
-----------------------------------------------------   ---------  ---------  ---------
<S>                                                     <C>        <C>        <C>
Debt assumed in connection with purchase
 of computer equipment                                  $ 204,000  $ 544,000  $       -
Net book value of equipment for direct
  financing lease                                       $  38,916  $       -  $       -
                                                        ---------  ---------  ---------
Refinancing of notes payable                            $  30,953  $       -  $       -
                                                        ---------  ---------  ---------
</TABLE>

8.       Litigation

The Partnership, through Commonwealth Capital Corp, has initiated a lawsuit
against a customer for the non-return of leased equipment. Management believes
that the Partnership will prevail in this matter and that the outcome of this
uncertainty is not expected to have a material adverse impact to the financial
statements of the Partnership. The Partnership has approximately $250,000 of
unreserved accounts receivable relating to this matter. The complaint alleges
that the named defendant has not returned the proper equipment stated in the
master lease agreement and is seeking restitution for lost monthly rentals,
taxes, attorney fees and costs, plus interest. A court date has been set for May
14, 2003.

                                       21
<PAGE>

9.       Reconciliation of Net (Loss) Income Reported for Financial Reporting
         Purposes to Taxable (Loss) Income on the Federal Partnership Return

<TABLE>
<CAPTION>
Year ended December 31,                                    2002      2001       2000
-----------------------------------------------------   ---------  ---------  ---------
<S>                                                     <C>        <C>        <C>
Net (loss) income for financial reporting
     purposes                                           $(237,111) $ 170,529  $(205,279)
     Adjustments
          (Loss) on sale of computer equipment             (9,911)  (311,306)  (308,635)
          Depreciation                                   (117,233)    13,439    533,443
          Amortization                                     14,289      9,728     40,791
          Bad debt expense                                 14,587    203,649          -
          Unearned lease income                            36,620       (138)   (23,447)
          Other                                          (117,943)   (57,478)   256,461)
                                                        ---------  ---------  ---------
Taxable (loss) income on the Federal
 Partnership return                                     $(416,702) $  28,423  $ 293,334)
                                                        =========  =========  =========
</TABLE>

The "Adjustments - Other" includes financial statement adjustments reflected in
the tax return in the subsequent year.

                                       22
<PAGE>

10.      Quarterly Results of Operation (Unaudited)

Adjustment for (loss) on sale of equipment is due to longer depreciation lives
for tax reporting purposes.

Summarized quarterly financial data for the years ended December 31, 2002 and
2001 is as follows:

<TABLE>
<CAPTION>
                                                                        Quarter ended
                                           ------------------------------------------------------------------
                                              March 31          June 30       September 30       December 31
                                           --------------   --------------    -------------    --------------
<S>                                        <C>              <C>               <C>              <C>
2002
Revenues
     Lease and other                       $      108,075   $      110,462    $      96,821    $       109,748
     Gain on sale of computer
      equipment                                     6,041           11,685                -               (98)
                                           --------------   --------------    -------------    --------------
Total revenues                                    114,116          122,147           96,821           109,650
Costs and expenses                                155,992          165,636          193,903           164,314
                                           --------------   --------------    -------------    --------------
Net (loss)                                 $      (41,876)  $      (43,489)   $     (97,082)   $      (54,664)
                                           ==============   ==============    =============    ==============
(Loss) per limited
 partner unit                              $         (.07)  $         (.07)   $        (.15)   $         (.09)
                                           ==============   ==============    =============    ==============
</TABLE>

                                       23
<PAGE>

<TABLE>
<CAPTION>
                                                                        Quarter ended
                                           ------------------------------------------------------------------
                                              March 31          June 30       September 30       December 31
                                           --------------   --------------    -------------    --------------
<S>                                        <C>              <C>               <C>              <C>
2001
Revenues
     Lease and other                       $      194,105   $      190,500    $     278,665    $      105,521
     Gain on sale of computer
      equipment                                    41,750           26,658          104,929            12,212
                                           --------------   --------------    -------------    --------------
Total revenues                                    235,855          217,158          383,594           117,733
Costs and expenses                                211,575          165,539          214,259           195,438
                                           --------------   --------------    -------------    --------------
Net income (loss)                          $       24,280   $       51,619    $     169,335    $      (74,705)
                                           --------------   --------------    -------------    --------------
Income (loss) per limited
 partner unit                              $         0.04   $         0.08    $        0.27    $        (0.12)
                                           --------------   --------------    -------------    --------------
</TABLE>

The cumulative gain or loss on sale of computer equipment is included in
revenues or costs as appropriate.

                                       24