Which of the following situations require the company to both record a liability and disclose it in the notes?

1. A lawsuit has been filed against Clay Corporation. The lawyer for Clay Corporation feels there is only a remote chance that the company will lose the lawsuit.

2. Hoffman Company's major product is sold with a warranty. Approximately 5% of sales are returned for repairs, and each repair costs, on average, $20.

3. Hubbard, Inc., has filed a lawsuit. Hubbard's lawyers feel that it is probable that the company will win the suit.

4. Smith Company inserts a $1.00 off coupon in 300,000 copies of the Sunday paper. In the past, 5% of the coupons were redeemed.

5. Lucky Lady Casino estimates that casino visitors have kept $100,000 worth of chips as souvenirs. Approximately 10% of those chips will eventually be turned in to the casino for the cash.

6. A lawsuit has been filed against Newman, Inc. The lawyer for Newman feels that it is probable that the company will lose the lawsuit. However, there is no reasonable way to estimate the amount of the loss.

7. A lawsuit has been filed against Shaw Company. The lawyer for Shaw feels that it is possible that the company will lose the suit.

(Answer: Required or Not Required)