Preheat oven to 350 degrees F (175 degrees C). Grease and flour a 9 inch square pan. Sift together the flour, baking powder and salt. Set aside.
In a large bowl, cream together the shortening and 2/3 cup sugar until light and fluffy. Beat in the egg, then stir in the vanilla. Beat in the flour mixture alternately with the milk. Stir in cherries and chopped nuts. Pour batter into prepared pan.
Bake in the preheated oven for 40 to 50 minutes, or until a toothpick inserted into the center of the cake comes out clean. Allow to cool. Serve with cherry sauce.
To make cherry sauce: In a saucepan, combine 1/2 cup sugar, cornstarch and salt. Blend in 3/4 cup reserved cherry juice and 1 cup water. Stir in almond flavoring and red food coloring. Cook over medium heat, stirring frequently, until mixture thickens.
