In a large mixing bowl, beat the softened cream cheese with a hand mixer until smooth and creamy.

Add the powdered sugar and vanilla extract to the cream cheese, and continue to beat until fully combined.

In a separate bowl, whip the heavy cream until stiff peaks form.

Gently fold the whipped cream into the cream cheese mixture until well combined, being careful not to deflate the whipped cream.

Spread the cheesecake topping evenly over the cooled red and white cake.

Arrange the sliced strawberries and blueberries on top of the cheesecake layer to create a flag design.

Chill the cake in the refrigerator for at least 2 hours before serving to allow the topping to set.