Sauerkraut Apple Cake

4 eggs
1 cup granulated sugar
1/2 cup packed brown sugar
1 (14 ounce) can sauerkraut, rinsed and drained
1 large tart apple
1 cup vegetable oil
1 cup chopped walnuts
2 cups all-purpose flour
2 teaspoons baking powder
2 teaspoons ground cinnamon
1 teaspoon baking soda
1 teaspoon salt
1/2 teaspoon ground nutmeg

In a large bowl, beat eggs and sugars; set aside. Squeeze sauerkraut until dry; finely chop and add to egg mixture. Peel and finely grate apple; squeeze dry. Stir into egg mixture. Add oil and walnuts. Combine flour, baking powder, cinnamon, baking soda, salt and nutmeg; stir into egg mixture. Line the bottom of two 8-inch round cake pans with wax paper; grease and flour paper and sides of pan. Pour batter into pans. Bake at 350 degrees F for 35 to 40 minutes or until a wooden pick inserted near the center comes out clean. Cool in pans for 10 minutes before inverting onto a wire rack to cool completely before frosting.

Cream Cheese Frosting:
8 ounces cream cheese, softened
2 to 3 tablespoons whipping cream, divided
4 1/2 cups confectioners' sugar
1 tablespoon grated orange peel
1/2 teaspoon ground cinnamon
1 teaspoon vanilla extract
Chopped walnuts (optional)

Beat cream cheese and 2 tablespoons cream in a small mixing bowl. Add sugar; beat until fluffy. Add orange peel, cinnamon and vanilla extract; mix well. Add remaining cream if needed. Spread between layers and over entire cake. Garnish with chopped walnuts if desired. Store in the refrigerator.

Yields 10 to 12 servings.