01 - Preheat the oven to 350°F. Grease and flour two 8-inch round cake pans, or line them with parchment paper.
02 - In a medium bowl, whisk together the all-purpose flour, baking powder, and salt. Set aside.
03 - In a large mixing bowl, beat the softened butter and granulated sugar together using an electric mixer until light and fluffy, approximately 3 to 4 minutes.
04 - Add the eggs one at a time, beating well after each addition. Stir in the vanilla extract and cotton candy flavoring until evenly incorporated.
05 - Gradually add the dry ingredient mixture to the butter mixture, alternating with the whole milk. Begin and end with the dry ingredients, mixing until just combined. Do not overmix.
06 - Divide the batter evenly into two separate bowls. Add pink gel food coloring to one bowl and blue gel food coloring to the other. Gently fold each until the color is uniform throughout.
07 - Pour each colored batter into the prepared cake pans. Bake for 28 to 32 minutes, or until a toothpick inserted into the center of each layer comes out clean.
08 - Allow the cakes to cool in the pans for 10 minutes, then turn them out onto wire racks to cool completely before frosting.
09 - Beat the softened butter for the buttercream until creamy and smooth. Gradually add the sifted powdered sugar in batches, beating well after each addition. Mix in the cotton candy flavoring and 3 to 4 tablespoons of milk or heavy cream until the frosting reaches a silky, spreadable consistency.
10 - Divide the buttercream evenly into two portions. Tint one portion pink and the other blue using gel food coloring, mixing each until the color is uniform.
11 - Level the cake layers with a serrated knife if necessary. Place the first layer on a serving plate and spread one color of buttercream evenly over the top. Place the second layer on top and frost the entire exterior of the cake with alternating swirls of pink and blue buttercream using an offset spatula.
12 - Decorate the frosted cake with tufts of fresh cotton candy and sprinkles just before serving to prevent the cotton candy from melting.