Keyboard not found in initial setup.
Out of the box with no instructions I am trying to set up my iMac. Screen shows a diagram of keyboard alternating with diagram of back of mouse. What next?
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If this iMac is brand new -- you can detach the lightning cable (charging purpose mainly, keyboard can be used as wired keyboard if you keep the connection) for both keyboard and mouse.
Make sure both mouse and keyboard are on -- there is a switch -- by showing "green" as "power on"
Turn on iMac -- by following the prompt - keyboard and mouse should be paired with your new iMac.
If you really have issues -- an old pair of wired mouse/keyboard can be a life-saving devices to have around.