Can drywall with ripped paper be repaired?
Short answer:  Yes.  

Long answer:  How


Use a utility or x-acto knife to cut away enough of the paper that you get a nice clean edge that isn't pulled away from the underlying gypsum.
Use a very small amount of joint compound and a 6" putty knife to apply a nice thin coat of joint compound over the damaged area.  Don't use too little - a little too much is easy to fix, too little isn't.
Allow to dry until it's firm to the touch.
Use a clean damp sponge to smooth the surface of the patch down to a nice clean finish.
Let dry completely.
Prime!!!  Always prime fresh joint compound or the paint won't stick.
Touch up with existing paint color.