Preheat oven to 350F. Prepare frosting first. In large mixing bowl, beat cream cheese and butter until smooth. Add powdered sugar alternately with milk, beating until well blended. Remove 1 cup frosting from bowl and set aside. Add eggs to remaining frosting mixture, beating on slow speed with mixer. Add vanilla; beat until blended. In small bowl, combine flour, baking powder and salt. Add flour mixture to mixing bowl alternately with water. Continue beating 1 to 2 minutes. Pour into 8 x 8 inch pan. Bake 35 to 45 minutes until toothpick inserted comes out clean.
Cool 5 minutes; remove from pan. Cool completely. Place cake on serving plate. Spread sides and top of cake with the reserved remaining frosting. Serve cooled.
Cajun Country -- New Iberia, Louisiana