A black square PQRS has been cut into two parts. One part of it is shown in Panel I. Which one of the shapes in Panel II is the other part?

To find the missing piece, we identify the white complement region inside the square $PQRS$ in Panel I and see which of the shapes in Panel II can be formed by rotating or reflecting it (standard rigid planar motion/rotation).

1. Let the square $PQRS$ be represented on a $5 \times 5$ grid where $(1,1)$ is the top-left and $(5,5)$ is the bottom-right.

2. The black region in Panel I occupies the outer border and some inner cells, leaving a distinct white shape formed of contiguous unit blocks.

3. Rotating the white cutout by $90^\circ$ counterclockwise (or matching its shape directly) yields the exact configuration shown in (iii).

Therefore, shape (iii) is the other part, which corresponds to option (C).