Step 1: Preheat oven to 350 degrees F (175 degrees C).
Step 2: In a large bowl, cream together butter and sugar until smooth. Beat in the egg, water and almond extract.
Step 3: In another bowl, combine the flour, baking powder and salt; stir into the creamed mixture. Stir in almonds and coconut.
Step 4: Pinch off about 1 very heaping tablespoonful of dough, then roll into a ball. Place the balls 2 inches apart onto the cookie sheet, then flatten slightly with a floured fork.
Step 5: Bake for 8 to 10 minutes in the preheated oven, or until lightly browned on the bottom. Allow cookies to cool on baking sheet for 5 minutes before removing to a wire rack to cool completely.
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