Praise be to Allah, the Lord of the Worlds.
Offering condolences is an act of Sunnah, and receiving people coming to pay their condolences at the deceased`s home or else is a means of achieving that Sunnah. There is no harm in offering tea or coffee, but it is prohibited to offer cigarettes and intend exaggeration or showing off when making and offering food to condolence payers.
It is better that the food is made only to the family of the deceased, as they are busy with that. The evidence on this is the narration in which Abdullah bin Ja'far said: "When the news of the death of Ja'far came, the Prophet said: 'Prepare some food for the family of Ja'far, for indeed something has happened to them that will keep them busy.'"{Related by Tirmithi}.
As for giving out sweets during the days of condolence, if this is intended as an act of charity on behalf of the deceased, then we pray that Allah the Almighty blesses him with its reward. However, there should be no exaggeration in spending money on such a thing. As for dedicating a certain day for doing that, there is no evidence from Sharia texts to that end, and we don`t know whether it is prohibited or permitted, and thus it remains within the domain of what is lawful.
The expenses related to preparing the deceased for burial are to be covered from his estate. However, it isn`t permissible to cover the expenses of the condolence period from his estate, unless the heirs approved of that. If some of them were minors, then it isn`t permissible to cover any of that from their shares, even if they approved it. And Allah the Almighty knows best.