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\begin{array}{l}\phantom{111)}\phantom{1}\\111\overline{)123}\\\end{array}
Use the 1^{st} digit 1 from dividend 123
\begin{array}{l}\phantom{111)}0\phantom{2}\\111\overline{)123}\\\end{array}
Since 1 is less than 111, use the next digit 2 from dividend 123 and add 0 to the quotient
\begin{array}{l}\phantom{111)}0\phantom{3}\\111\overline{)123}\\\end{array}
Use the 2^{nd} digit 2 from dividend 123
\begin{array}{l}\phantom{111)}00\phantom{4}\\111\overline{)123}\\\end{array}
Since 12 is less than 111, use the next digit 3 from dividend 123 and add 0 to the quotient
\begin{array}{l}\phantom{111)}00\phantom{5}\\111\overline{)123}\\\end{array}
Use the 3^{rd} digit 3 from dividend 123
\begin{array}{l}\phantom{111)}001\phantom{6}\\111\overline{)123}\\\phantom{111)}\underline{\phantom{}111\phantom{}}\\\phantom{111)9}12\\\end{array}
Find closest multiple of 111 to 123. We see that 1 \times 111 = 111 is the nearest. Now subtract 111 from 123 to get reminder 12. Add 1 to quotient.
\text{Quotient: }1 \text{Reminder: }12
Since 12 is less than 111, stop the division. The reminder is 12. The topmost line 001 is the quotient. Remove all zeros at the start of the quotient to get the actual quotient 1.