With an electric mixer, cream the butter and sugar until light and fluffy. Beat in the egg and extracts. Mix in the flour, baking powder and salt.
Divide the dough into thirds. Stir red food colouring into one portion of dough; stir green food colouring into another portion. Leave remaining dough plain. Cover and refrigerate for at least an hour.
Divide each portion of dough into four equal pieces. Roll each piece into a 12 inch rope. Place a red, a green and a plain rope next to each other. Cut though all three ropes at 1 inch intervals forming sets of three differently coloured dough.
Roll each set of dough into a ball; place balls 3 inches apart on a cookie sheet lined with parchment paper. Flatten with a glass dipped in the 1/4 cup sugar. Bake in a 375F oven for 8 minutes. Cool on a wire rack.