Heat oven to 375°.

Combine 2 cups sugar and butter in mixing bowl. Beat at medium speed, scraping bowl often, until creamy. Add egg and continue beating until well mixed. Add flour, baking powder and salt and beat at low speed until well mixed.

Place remaining 1 cup sugar in another bowl. Place 1 cup of water in another bowl.

Shape dough into 1-inch balls. Dip top of each ball into water, then into sugar. If using colored sprinkles, put the sprinkles in a little bowl. Dip dough ball into water and then into colored sugar. Place 2 inches apart onto ungreased cookie sheets.

Bake 8-14 minutes or until edges are lightly browned.