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\begin{array}{l}\phantom{12)}\phantom{1}\\12\overline{)85}\\\end{array}
Use the 1^{st} digit 8 from dividend 85
\begin{array}{l}\phantom{12)}0\phantom{2}\\12\overline{)85}\\\end{array}
Since 8 is less than 12, use the next digit 5 from dividend 85 and add 0 to the quotient
\begin{array}{l}\phantom{12)}0\phantom{3}\\12\overline{)85}\\\end{array}
Use the 2^{nd} digit 5 from dividend 85
\begin{array}{l}\phantom{12)}07\phantom{4}\\12\overline{)85}\\\phantom{12)}\underline{\phantom{}84\phantom{}}\\\phantom{12)9}1\\\end{array}
Find closest multiple of 12 to 85. We see that 7 \times 12 = 84 is the nearest. Now subtract 84 from 85 to get reminder 1. Add 7 to quotient.
\text{Quotient: }7 \text{Reminder: }1
Since 1 is less than 12, stop the division. The reminder is 1. The topmost line 07 is the quotient. Remove all zeros at the start of the quotient to get the actual quotient 7.