I don't think this is a puzzle. This seems to be a reading comprehension test, where the ability to understand the text and make basic deductions is assessed. You can do this without determining the exact set-up of the line:
A: Sally is first in line. This is false, because George is (somewhere) ahead of Jim, but Sally is directly before Jim, so George must be before Sally.
B: Sally is 5th in line. This is also false, because Sally is right before Jim, so she can't be the last of in a line of five people.
C: George is ahead of Jim. This is true and directly stated in the problem.
D: Jim is 1st in line. This is false, because George is ahead of Jim.
E: Sally doesn't like Tom. This is something we don't know. The text just talks about the relative positions of the people, from which we can't derive anything about the relationship between them. We don't even know whether Sally and Jim know each other.
The only option that applies is C.
The first four options test whether you have understood the text. The last option tests whether you're given to "reading between the lines" when there isn't anything there to read.