Find closest multiple of $16$ to $32$. We see that $2 \times 16 = 32$ is the nearest. Now subtract $32$ from $32$ to get reminder $0$. Add $2$ to quotient.
Find closest multiple of $16$ to $68$. We see that $4 \times 16 = 64$ is the nearest. Now subtract $64$ from $68$ to get reminder $4$. Add $4$ to quotient.
Since $4$ is less than $16$, stop the division. The reminder is $4$. The topmost line $0204$ is the quotient. Remove all zeros at the start of the quotient to get the actual quotient $204$.