CAKE: Preheat oven to 350 degrees. Sift together flour, baking powder, baking soda and salt, set aside. In a large mixing bowl cream together butter and sugar until light and fluffy. Add vanilla and fresh strawberries to the mixing bowl and stir to incorporate. Put 2 whole eggs and 1 egg yolk in a bowl. Add eggs 1 at a time to the mixing bowl, beat the batter and scrape down the sides of the bowl after each incorporation Continue to beat while alternately adding the sifted dry ingredients and milk to the batter ending with the dry ingredients. Scrape down sides of the mixing bowl.
Line cupcake tins with paper cups and fill about 3/4 of the way full. Bake in a pre-heated 350 degree oven for 18 minutes. A toothpick inserted in the center of the cupcake will come out clean when the cupcake is done. Remove the cupcakes from the oven and allow to cool before topping with frosting and berries.
FROSTING: Cream the butter. Beat in vanilla and diced strawberries. Gradually add confectioners' sugar, one cup at a time. Beat well after each addition. If the frosting is too dry, slowly add milk and beat until creamy. Spread or pipe buttercream frosting on top of each cupcake and garnish with sliced fresh strawberries.
Cook's Note: If you want "pink" cupcakes, add a few drops of red food coloring to the batter.