Preheat the oven to 350 degrees.
In a mixer, beat the softened butter and sugar on medium high for several minutes until the butter is fluffy. On a lower speed, add coconut extract (or vanilla), lime juice and an egg.
In a separate mixing bowl combine the dry ingredients of flour, salt, and baking powder. Slowly add the flour mixture to the creamy butter and sugar mixture in the mixer. Continue mixing at low speed until the flour is well combined.
Remove the mixing bowl from the mixing stand. Gently fold in 1 cup of lightly toasted unsweetened coconut. (To toast the coconut, heat the coconut flakes on a baking pan in the oven at 300° for about 5 - 10 minutes until they are slightly golden brown.)
Line a baking pan with parchment paper. Roll the coconut sugar cookie dough into balls, about 1½ to 2 inches. Roll the dough balls in a small bowl of granulated sugar to coat them. Then place them on the baking pan, leaving plenty of space in between (about 2 inches in between each dough ball.)
Use a glass with a flat bottom or another hard flat surface to gently press the dough balls into discs. Bake at 350° for 12 - 15 minutes, until the bottoms and edges are golden brown.
Use a spatula to place the cookies on a cooling rack and allow them too cool at least 15 minutes.