Step 1: Whisk together flour, baking powder, baking soda, salt, and nutmeg in medium bowl.
Step 2: Whisk together egg and milk in small bowl.
Step 3: Place butter and brown sugar in large bowl and beat with electric mixer on medium-high speed until light and fluffy, about 2 minutes.
Step 4: Add egg mixture and beat on medium-high, scraping down sides of bowl, until well combined, about 30 seconds.
Step 5: Add flour mixture and coconut, and mix on low speed until just incorporated, 15 to 30 seconds.
Step 6: Turn dough out onto lightly floured surface and, using floured hands, shape into 15-inch log.
Step 7: Flatten top and sides of log so that it measures 1 inch high and 3 inches wide. Wrap tightly with plastic wrap and refrigerate until firm, about 45 minutes.
Step 8: Preheat oven to 350F. (I use 325F)
Step 9: Remove chilled dough from refrigerator, unwrap, cut into 1/4-inch-thick slices, and arrange slices 1 inch apart on parchment lined baking sheet.
Step 10: Dip dinner fork in flour, then make crosswise indentations in dough slices.
Step 11: Bake until cookies are toasty brown, 15 to 18 minutes. (I do 9-10 minutes).
Step 12: Cool cookies on baking sheets for 10 minutes, then transfer to racks to cool to room temperature.
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