It's finally Christmas eve. Bob and Phil's show, "Playing Around", is about to open, and the lodge is packed, thanks to Bob's appeal on the Ed Harrison show. As Bob gives directions to the guys from the 151st Division who showed up to honor the General, Betty arrives from New York. Tom is forced to put on his old military uniform because Emma (Mary Wickes) "thoughtlessly" sent all of his other suits to the cleaners. When Tom enters the showroom, the audience gives him a standing ovation, and the 151st Division marches onto the stage singing "The Old Man". After the General inspects his troops, Bob and Phil sing and dance to "Gee, I Wish I was Back in the Army", joined onstage by Betty and Judy. As the show ends, snow starts to fall. Bob and Phil, now dressed as Santas, along with Betty and Judy, perform the final number "White Christmas". Bob notices a present addressed to him from Betty has been added to his sack of toys. He opens it to find a statue of a knight in shining armor seated on a white horse. In the final scene, Bob kisses Betty, Phil kisses Judy, and the audience joins them in signing "White Christmas".