A boy walks into the bedroom and sees mom and dad having sex. The boy says, "What are you doing?"
"Baking a cake."
The next day he walked up to his mom doing dishes.
"Remember when you were making a cake? I LICKED UP ALL THE FROSTING."
Listen up, you dummy! The joke is that the parents were doing the deed, but they told their kid they were "baking a cake." The kid then says he "licked up all the frosting," which is a crude way of saying he was playing with his parent's goo.