In small bowl, mix flour, baking powder, baking soda and salt; set aside.

In large bowl, beat granulated sugar, softened butter and cream cheese with electric mixer on medium speed until fluffy; scrape side of bowl. Beat in egg just until smooth. Beat in vanilla. On low speed, beat in flour mixture until well blended. Let stand 5 minutes.

Divide dough in half; shape each half into a roll, 8 inches long and 2 inches in diameter. (If dough is sticky, use floured fingers.) Wrap dough logs tightly with plastic. Refrigerate about 2 hours or until very firm.

Heat oven to 375°F. Unwrap 1 of the dough logs; cut into 1/2-inch slices. Place 2 inches apart on ungreased cookie sheets, reshaping if necessary. Sprinkle with half of the sparkling sugar. Repeat with remaining dough log.

Bake 8 to 10 minutes or until edges are set. Cool 1 minute; remove from cookie sheet to cooling rack. Cool completely, about 30 minutes. Store covered in airtight container.