It is a towel.
The required word is BANANA.
The given words can be formed into the following words:
Hairball (or airbag)
Word from the first row: AUGUST
Word from the second row: SCRIPT
Word from the circled letters: STRAPS or SPRATS.
I am ERROR
I am trouble.
The word is Energy.
Nobody said anything about the order of 'g', 'r' and 'y' at the end of the word.
Also, we use energy every day.
L, A and E are the missing letters which forms the word EVALUATE when read clockwise.
Chair is the required five letter word.
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