Magic Mouse not working and cursor is frozen in corner of iMac

If your wireless keypad has a charging cable plug it in with that and then boot into Safe Mode according to Start up your Mac in safe mode - Apple Support and see if the problem persists. Reboot normally and check again.

NOTE: Safe Mode boot can take up to 10 minutes as it's doing the following; 

• Verifies your startup disk and attempts to repair directory issues, if needed

• Loads only required kernel extensions (prevents 3rd party kernel/extensions from loading)

• Prevents Startup Items and Login Items from opening automatically

• Disables user-installed fonts 

• Deletes font caches, kernel cache, and other system cache files

The following will require any USB keyboard and mouse. If you don’t have them, borrow or buy them, they are inexpensive!

1.     Connect the USB keyboard and mouse to the computer.

2.     Open System Preferences – Bluetooth

3.     Un-pair the wireless keyboard and mouse.

4.     Turn off Bluetooth

5.     Restart the computer in Safe Mode per the directions in https://support.apple.com/en-us/HT201262

6.     Restart the computer normally.

7.     Open System Preferences – Bluetooth

8.     Turn on Bluetooth

9.     Re-Pair the wireless keyboard and mouse.

10.  Unplug the USB keyboard and mouse and begin testing the wireless devices again. 

A couple of things to try.

• clean the optical sensor
• reset the Bluetooth module see below. (You’ll need a usb mouse to do this)

https://appleinsider.com/articles/21/01/05/how-to-reset-bluetooth-on-macos-big-sur

Shut down the the computer by holding down the power button. Then restart and test. If the problem persists please let us know.

Tried the above but I think my mouse is broken.