Cash paid for inventory is:

₹ 1,59,500

The correct answer is Option (3) - ₹ 1,59,500.

Cash paid for inventory = Credit Purchase - Increase in Trade payable
                                   = 160000 - 500
                                   = 159500

Increase in Trade payable = Trade payable at the beginning  - Trade payable at the end
                                       = 14000 - 14500
                                      = (500) Increase