These are my own instructions for assembling the Martha Stewart reversible purse.
The Martha Stewart reversible purse pattern is located here:
http://www.marthastewart.com/article/reversible-purse?lnc=13fbf423088 Click on “bag template” to get the pattern. For my little treat bags, I used it as printed, no enlargement required.
I construct it the same way I construct a lined sleeveless bodice in a dress/top. There is no need for any topstitching or hand-sewing to close any holes in the handles/straps. It is a little tricky at first, especially on such a small bag, but once you get the hang of it, you will love it! If you are having trouble, try it on a larger project first.
Cut out 4 bag pieces, 2 of the good material and 2 of the lining. (In this example, I used the same fabric for both)
On the outer fabric, sew the entire side and bottom seam. On the lining, sew the side seam and around the corners, but leave the bottom open for turning. Clip curves on both.
Turn the outer piece right side out and place into the lining, matching handles. The pins show where I left the bottom open.

Sew the outer piece and lining together at the handles, but leave the ¾” or so free. I placed pins where I started and stopped (but I left too much open here, ¾” works better on this small bag). There are 4 seams to do here. (If it was dress, it would be the 2 neck edges and underarms.) Clip curves.

Turn the entire bag right side out through the hole in the lining.

Make sure to get the handles turned completely.

Safety pin the lining together at the unsewn handle seam (akin to the shoulder seam). These are already right sides together.

Now, reach up through the hole in the lining and poke your finger through the strap to grasp the safety pin.

Pull the safety pin down through the strap and out the lining hole. The straps will come along. Pin the two outer handles right side together and sew the short seam. Also, pin and sew the lining seam (where the safety pin is).

The trickiest part, sewing the handle lining to the outer fabric, is next. I recommend starting with the longest handle to get the hang of it. Then move onto the tricky little handle.
Pull from the middle of the strap so that the two seams just sewn will lie flat upon each other. I’m holding it where I had stopped when I sewed the outer fabric to the lining. I will start sewing there, (I’ll actually flip it over and insert the machine needle where my thumb is), making sure to keep the raw edges even, matching up the top seam, and keeping the rest of the handle out of the way. Work slowly and stop to pull up more of the handle as you sew if needed.

Repeat for the other side seam of that same handle. When both are completed, you have a fully sewn handle with no holes in any of the seams.

Reach into the bag and pull the handle out to the right side.
Voila! It’s a perfect handle! Repeat for the other handle.

Fold in the seam allowances of the lining opening. Close with slip-stitching by hand or edge-stitch with machine.

Push the lining into the bag. Press.
Admire your finished bag!