A. The pillows' embroidered with yellow Ls all over it.
B. What's so special about that pillow of her's?
C. Why should someone's pillow be hers alone in such a big family?
D. Its like something from the 1950's.
The answer is C, because in A you don't need the apostrophe on pillows, B you don't need the apostrophe in hers, and in D you need an apostrophe in it's.