Apple Lemon Country Cake

1 cup sugar
1 egg
1/4 cup butter
1 cup all purpose flour
1/2 tsp. nutmeg
1/2 tsp. cinnamon
1 tsp. baking soda
3 cups peeled and thinly sliced apples
1 cup chopped nuts

Comine sugar, egg, and butter; beat until light and creamy. Add remaining ingredients except apples and nuts. Blend well. Stir in apples and nuts. Turn into a 9-inch square pan. Bake in 350 degree oven for 30 to 40 minutes. Serve with warm Tangy Lemon Sauce and whipped cream.

Tangy Lemon Sauce: In heavy 1-qt. saucepan mix 3/4 cups sugar and 2 tablespoons cornstarch. Gradually stir in 1 1/2 cups water until smooth. Cook over medium heat, stirring frequently, until mixture comes to a full rolling boil. Boil 1 minute, stirring constantly. Remove from heat. Stir in 1/4 cup butter, 3 tablespoons lemon juice, and 2 tablespoons grated lemon peel.