Preheat oven to 350°F. with an electric mixer, beat the sugar and applesauce.
Mix in the egg whites and lemon extract. Add the flour and milk alternately, using the flour first and last. Mix in the baking powder. Pour the cake batter into a 10-inch tube pan (or one sprayed with cooking spray) and bake about 1-1/2 hours. Remove the cake from the pan and let it cool for about 20 minutes.
Heat the lemon zest and lemon preserves in a saucepan for about 1 minute (until melted enough to pour) and drizzle over the cake.