Preheat oven to 350 F. Grease and flour two 9 inch round cake pans; set aside. Whisk together flour, baking powder and salt in a medium bowl; set aside. Whisk together milk, jam and 2 Tbsp food coloring in a small bowl. Beat together sugar, oil, vanilla and eggs in a mixer on medium-high speed until pale and smooth, 2-3 minutes. In 3 additions, alternately add dry and wet ingredients to sugar mixture, beginning and ending with dry; mix until combined. Divide batter between prepared pans and smooth tops; bake until a toothpick inserted in the middle of cakes comes out clean, about 40 minutes. Let cool 15 minutes, unmold, then cool completely.
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In a large bowl, beat butter and cream cheese on high speed of a mixer until smooth and fluffy, 1-2 minutes. Add remaining food coloring, confectioner’s sugar and strawberry extract; beat until smooth. Place one cake upside down on a cake stand and spread 1/3 of the frosting over the top. Cover with the second cake, top side up; frost top and sides of cakes with remaining frosting; refrigerate for 1 hour before serving. Serve at room temperature.
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