Preheat the oven to 350 degrees and grease a 6-inch round cake pan. In a mixing bowl, cream the butter and granulated sugar until light. Add the eggs one at a time, then stir in 1 teaspoon of the vanilla.
In a separate bowl, whisk the flour and baking powder. Alternate adding the dry mixture and milk to the wet ingredients, mixing just until smooth. Pour the batter into the pan and bake for 25 to 30 minutes until a toothpick comes out clean. Let the cake cool completely.
While the cake cools, make the meringue toadstools. Whip the egg whites with the salt until soft peaks form. Gradually add the powdered sugar and remaining teaspoon of vanilla, then continue whipping until stiff peaks hold. Divide a small portion of the meringue and tint it red with food coloring. Pipe white stems and red caps onto a parchment-lined sheet, then dust the caps lightly with cocoa powder for spots. Bake the meringues at 200 degrees for 1 hour until dry, then cool.
Frost the cooled cake with a simple dusting of cocoa powder around the edges to suggest a forest floor. Place the meringue toadstools on top to finish.