According to the first law of thermodynamics:
\[
\Delta U = Q - W
\]
where:
- \(\Delta U\) is the change in internal energy,
- \(Q\) is the heat added to the system, and
- \(W\) is the work done by the system on the surroundings.
Here, \(Q = 500 \, \text{cal}\) and \(W = 350 \, \text{cal}\). Thus:
\[
\Delta U = 500 - 350 = 150 \, \text{cal}
\]
Since the work is done on the surroundings, the change in internal energy is -150 cal.
Thus, the correct answer is Option (B).