Preheat oven to 325F. Generously grease two 9-inch round nonstick (gray, not black) cake pans. Line bottoms with parchment paper or wax paper, then grease again.
Prepare cake as directed, adding 1-1/2 teaspoons coconut extract with water. Divide batter evenly in pans; smooth tops with spatula.
Place pans 3 inches apart on middle rack of oven and bake for 25 to 30 minutes, or until a toothpick inserted into the center comes out clean. Cool cakes in pans on wire rack for 15 minutes. Run sharp knife around edges to loosen cakes, then invert onto separate plates to cool completely before frosting.
Fluffy Coconut Frosting:
3 large Egg Whites
1 cup Granulated Sugar
3 Tbsp Cold Water
1/4 tsp Cream of Tartar
1 tsp Coconut Extract
2 cups Sweetened Coconut Flakes, divided
In a double-boiler over simmering water, beat egg whites, sugar, cream of tartar, and cold water with a portable mixer on medium-high speed for 7 minutes, or until it is glossy and forms soft peaks. Stir in coconut extract.
Place 1 cake layer on a serving plate, topside down, and spread with 1 cup of the frosting. Sprinkle with 1 cup of the coconut. Top with the other cake layer, topside up. Spread the sides and then the top of the cake with the frosting. Sprinkle the remaining 1 cup of coconut on top of the cake. Serve within an hour.  Makes 12 servings.