Answer
120 R 7
Work Step by Step
86 is larger than 10, so the first step in the long division will be to divide 86 into 103. The quotient of $103 \div 86$ will therefore be placed over the 3 in 10327. Since there must be a digit in the quotient placed above each digit in the dividend, the quotient for $10327 \div 86$ will be a 3 digit answer, with one digit over the 3, another digit over the 2 and another digit over the 7.
Since 120 R 7 is the only 3 digit answer given, 120 R 7 is the correct answer choice.
