diff --git a/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/Gemfile b/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/Gemfile
new file mode 100644
index 0000000000..b566789dfb
--- /dev/null
+++ b/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/Gemfile
@@ -0,0 +1,8 @@
+source "https://rubygems.org"
+
+gem "httparty"
+
+group :test do
+  gem "test-unit"
+  gem "mocha"
+end
diff --git a/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/hello_world/Gemfile b/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/hello_world/Gemfile
index b566789dfb..3abba1b8b3 100644
--- a/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/hello_world/Gemfile
+++ b/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/hello_world/Gemfile
@@ -1,8 +1,3 @@
 source "https://rubygems.org"
 
 gem "httparty"
-
-group :test do
-  gem "test-unit"
-  gem "mocha"
-end
diff --git a/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/tests/unit/test_handler.rb b/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/tests/unit/test_handler.rb
index d496ec1866..df66b969a1 100644
--- a/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/tests/unit/test_handler.rb
+++ b/samcli/local/init/templates/cookiecutter-aws-sam-hello-ruby/{{cookiecutter.project_name}}/tests/unit/test_handler.rb
@@ -77,6 +77,16 @@ def mock_response
     end
   end
 
+  def expected_result
+    {
+      statusCode: 200,
+      body: {
+        message: 'Hello World!',
+        location: '1.1.1.1'
+      }.to_json
+    }
+  end
+
   def test_lambda_handler
     HTTParty.expects(:get).with('http://checkip.amazonaws.com/').returns(mock_response)
     assert_equal(lambda_handler(event: event, context: ''), expected_result)