Luke gets caught up in the Christmas spirit and wants to buy Kate a diamond ring that he can't afford. After he buys it, he tries to sell it to pay for Kate's hospital bill. Luke and Grandpa find out what Kate has for them on layaway.
Little Luke is highly resistant to the idea of taking tall and awkward Agnes Maypole to a school party, but when Grandpa finds the girl to be kind and considerate he becomes equally determined to compel the boy to honor his commitment to go ahead with the date.
Grandpa, Luke, and Kate return to Smoky Corners for Great Grandma McCoy's 100th birthday, but worry that their modest keepsake gifts don't measure up to those given by the newly-prosperous McCoys who remained in West Virginia.
Grandpa and Luke convince Kate to enter a local merchant's "Mrs. Homemaker Contest" when they realize that the first prize of $50 in merchandise would almost exactly cover the cost of the new gun they've been admiring.
Grandpa decides to turn the tables after a fast-talking shooting gallery proprietor hustles Little Luke out of $14 in proceeds from the sale of church social tickets.