"El sartén es suyo."
tuyo (from the possesive pronoun 'tu') is used when the owner would be addressed in second person non-formal singular (tú)
suyo (from the possesive pronoun 'su') is used when the owner would be addressed in third person or in second person formal (both singular or plural).
There is one exception to this rule. 'ustedes' would be called formal in Spain and would comply to the rule, whereas in Latin America it is just used for any second person plural, so there you could call it an exception.*
tuyo - the owner would be addressed as tú
suyo - the owner would be addressed as 'él', 'ella', 'ellos', 'ellas' (these are 3rd person) 'usted', 'ustedes' (these are 2nd person formal*)
Why 'it is your pan' would not be accepted: I guess because this exercise is focused to understand the differences between su/suyo and tu/tuyo (your/yours)