Preheat oven to 350°F (175°C) and line a muffin tin with 12–14 cupcake liners.

1. In a medium bowl, whisk together flour, baking powder, and salt.
2. In a large mixing bowl, beat butter and sugar until light and fluffy.
3. Add eggs one at a time, beating well after each. Stir in vanilla and coconut extract.
4. Alternate adding the dry ingredients and coconut milk, beginning and ending with the dry mixture. Mix until just combined.
5. Fold in shredded coconut gently.
6. Divide batter evenly into cupcake liners, filling about 2/3 full.
7. Bake for 18–22 minutes, or until a toothpick inserted in the center comes out clean.
8. Cool in the tin for 5 minutes, then transfer to a wire rack to cool completely.
9. For the frosting, beat cream cheese or butter until smooth. Gradually add powdered sugar, then mix in vanilla or coconut extract and enough milk/cream to reach desired consistency.
10. Frost cooled cupcakes and sprinkle with extra shredded coconut.